Day trading has become increasingly popular in recent years, with more and more people looking to make a quick buck by day trading stocks or other financial instruments. With so many day traders, it can be hard to know where to start. That’s why day trading courses are becoming an attractive option for many new day traders – they promise to teach you the ins and outs of day trading quickly and effectively. But are day trading courses worth the money? In this article, we’ll explore the pros and cons of taking a day trading course so that you can decide if one is right for you.
Key Takeaways
- Day trading carries a high risk, and there are no guarantees of success.
- Realistic expectations should be had when day trading, as losses may still occur even with a mentor or course.
- Expectations of guaranteed success with minimal effort should be treated as a scam and avoided entirely.
- A day trading course may be helpful for beginners looking for guidance, expert advice, and networking opportunities.
- Before buying a day trading course, one needs to research it thoroughly to ensure it is reputable and offers value for the cost.
- Books can provide supplemental knowledge but will not guarantee success in day trading due to the complexity of the stock market.
Are day trading courses worth it?
That depends on your individual goals and how much time you want to commit to day trading. I spent the first three years of my day trading career buying every course from every online guru that I could find. I was a complete beginner with no knowledge of the markets, and I was an easy sell.
“Teach me everything I need to know in one course? Sign me up!”
Several thousand dollars later, I found, through painfully expensive trial and error, a day trading course can be worth it if the following things can be confirmed before purchase:
- Proven Track Record
- The Educator or Service Trades What They Teach
- The Educator or Service Doesn’t Stream or Alert Their Trades on Low-float Penny Stocks to Their Chat Room
- Full, Money-back Guarantee
How to Avoid Penny Stock Scams
Don’t get scammed by false trading vendors – the internet can be a dangerous place when it comes to investing. Many YouTubers who claim they know all about trading may look trustworthy, but don’t forget that their main motive is often monetization and not helping you make money. Your hard-earned cash should go somewhere safe… like your pocket 😉 So, before you start yelling, “TAKE MY MONEY,” check for the following:
Proven Track Record
Having a proven track record is the single most important verifier. Individuals or companies with no proven track record of consistently profitable day trading offer many day trading courses. Without a track record, it isn’t easy to gauge the effectiveness of the strategies and techniques being taught.
Gurus know this. So, they make it easy to find their profitability to bring credibility to their course. The next thing to check will separate the fluff from the meat.
The Educator or Service Trades What They Teach
If you’re serious about becoming a successful trader, make sure your mentor has earned their stripes in the game. Don’t just settle for anyone – go with an experienced pro who puts their money where their mouth is and makes profitable trades regularly.
The Educator or Service Doesn’t Stream or Alert Their Trades on Low-float Penny Stocks to Their Chat Room
After seeing the broker statements showing the individual or service makes money from the strategies they teach, you have to check if they are “alerting” these trades. The biggest red flag in day trading is a guru that alerts their trades on low-float penny stocks to their members.
Why is alerting trade on low-float penny stocks bad? First, let’s look at what “low float” means.
Low-float Penny Stocks
Low-float penny stocks have a very limited number of shares available to trade on the market. The total outstanding shares of a company could be 10,000,000, and institutions and insiders could own 50% of those, leaving 5,000,000 shares available for the public to trade. The remaining 5,000,000 is referred to as the “float” or “public float.”
The Scam
5,000,000 shares in the float might sound like a lot, but it’s not. It’s quite small. Gurus target these types of stocks because it doesn’t take much to influence the price. So, the guru will stream or alert the chat room they are buying ticker XYZ. Their followers start buying after the guru has bought. Since the float is low, the price will jump quickly. The guru will then sell their shares and alert the followers, and then the followers start selling, and the price plummets. The only person with any guaranteed profits is the one influencing the stock.
The Edge Test
The true test of the edge is if the trade would’ve worked without the guru’s influence on the stock. You can’t confirm this if the guru won’t stop alerting the trade. The quick litmus test is to look at the time of their alert and the volume on the chart. Did the volume have a big burst shortly after their alert? Then you can confirm that the strategy likely doesn’t work well if the guru isn’t alerting. This means you are fully dependent on the guru alerting the stock you are trading for it to work. If you depend on the guru’s influence, you’ll never be self-sufficient and likely won’t achieve your goals.
Money-Back Guarantee
Nothing says “peace of mind” like a full money-back guarantee. However, there are nuances to a money-back guarantee that you should know. Those are:
1. Restrictions on refund: Check the fine print of your day trading course’s money-back guarantee to see any restrictions, like a time limit or only completing a small portion of the entire course, before a refund will be granted. It is unrealistic to think you can watch all of the content and then ask for a refund. You should know quickly if the course is not for you. Don’t waste time.
2. Conditions for a refund: Find out what conditions are required to receive a refund, such as completing certain activities or sending a physical email to cancel before a specific day. Additionally, ensure that any fees your day trading course charges are refunded.
3. Exclusions from refund: Find out what is excluded from the day trading course’s money-back guarantee, such as mentorship programs or additional services offered.
Knowing these nuances can help you get your full money back if the course is not what you expected.
Benefits of a Day Trading Course
After you confirm to the best of your ability that what you are looking to learn from the course is something that is taught by a credible source, you can expect to receive the following benefits:
- Structured learning: A day trading course can provide a structured learning environment and guide you through the process of learning how to day trade. This can be especially helpful for beginners who may not know where to start.
- Expert guidance: Many day trading courses are taught by experienced traders who can provide valuable insights and guidance. Having an expert available to answer questions and provide feedback can help learn how to day trade.
- Strategies and techniques: A day trading course may teach specific strategies and techniques that can help identify and execute trades. These strategies and techniques may not be easily found through self-study or trial and error.
- Networking opportunities: Some day trading courses may provide networking opportunities with other traders or access to trading communities where you can discuss and exchange ideas with like-minded traders.
The Beginner Day Trader’s Dilemma
Most beginner day traders who don’t want quick results refuse to work on becoming self-sufficient day traders. Beginner or lazy day traders will drool at the offer of a guru alerting their trades. As someone who has day traded successfully for many years and has come from services that alerted their trades, I can confirm with 100% certainty that the only person making money off those alerts is the guru. This is especially true for penny stocks.
How to Become a Successful Day Trader
The best way to avoid day trading scams and become a successful day trader as quickly as possible is to vet them with the criteria I have outlined for you and find a mentor.
One-on-one Mentorship
Find a service that offers one-on-one mentorship. Having a day trading mentor can be immensely beneficial to a day trader’s success. A day trading mentor is a highly experienced day trader who has taken the time to develop detailed strategies and approaches to day trading. They possess the knowledge, experience, and resources to help day traders reach their goals by passing on their expertise and teaching them how to avoid costly mistakes.
Develop Your Skills Through Independent Study and Practice
Having a mentor will shorten your learning curve immensely, but it isn’t the only thing you need. You must dedicate hours and hours to developing your day trading skills through independent study and practice. Your mentor should have a curated list of courses and educational material they provide at no additional charge. The mentor will be there every step of the way to review your achievements and correct your path if you start to stray. The mentor is also there to answer questions you might have as you go through the coursework. The mentor isn’t going to upload their experience through a USB port at the base of your skull. Although, that might be available soon if Elon Musk has his way.
You will spend many hours studying these courses and then practicing the methods and strategies taught in them.
Paper Trade on a Demo Account
The best way to get practice is by paper trading on a demo account. Paper trading, also known as “simulated trading” or “demo trading,” is a trading method that enables day traders to practice their strategies without having to risk real money. It involves using a day trading platform with virtual money and the same features as live-trading platforms.
Many day trading platforms offer a demo account. Here are some of our favorites:
- TD Ameritrade (Thinkorswim) — Free
- DAS Trader Pro — 14-day trial
These platforms are our favorite because they offer the following:
- Real-time market data and analysis
- Slick day trading platform with a variety of tools and features
- Advanced charting
- 24/7 customer support
Nothing is ever 100%
No trading course or mentor will teach you a strategy that works 100% of the time. If there is anything we learned from Monty Python, the Holy Grail isn’t real. There are going to be losses, and that’s natural. Have realistic expectations and plan for them.
Any educator or service that claims success with minimal effort on your part should be treated as a scam and avoided entirely.
There are a few other things that you should consider before you embark on your journey to becoming a day trader, such as:
- No guarantee of success: There are no guarantees of success in the stock market, especially for day trading. Even if you follow the strategies and techniques taught, you may still experience losses.
- The complexity of the stock market: The stock market can be complex and unpredictable, and it can be difficult for even experienced traders to make profitable trades consistently. This makes it difficult for beginners to learn how to day trade successfully.
- Risk of financial loss: Day trading carries a high level of risk, and it is possible to lose a significant amount of money quickly. This risk is heightened for beginners who may not fully understand the risks involved or have the necessary knowledge and experience to make informed trades.
Day trading is difficult, and it’s not for everyone. You could spend many years attempting to be successful and still fail. It’s a harsh reality you need to accept. Day trading will test your emotional strength in the most brutal ways. Like they say, “if it were easy, everyone would do it.”
Can I learn to day trade from a book?
Like day trading courses, books can be as full of misinformation as everything else. Just because it’s a book doesn’t make it more reliable information. You should vet the author of the book and its content in the same way I have recommended above. Trading books often contain many technical analysis methods and no real trading strategies. It’s easy to copy text and share it, and the author knows that. Therefore, the real secret sauce is usually withheld, and it becomes the reader’s responsibility to take the methods in the book and create their strategy from it.
So, would I recommend learning to day trade from a book? No. Can you gain supplemental knowledge of methods that might be useful after you have some experience under your belt? Yes.
Bottom Line
Overall, buying a day trading course may be a good idea if you are a beginner looking for a structured learning environment, expert guidance, and access to specific strategies and techniques. It may also be helpful if you are looking for networking opportunities with other traders. However, it is important to thoroughly research any day trading course before purchasing to ensure that it is reputable and will provide value for the cost.