Is day trading profitable? You may have heard that 95% of traders fail. Is this true? If so, what can you do to not be part of the 95%?
Is day trading profitable - Here's what you need to know.
I’ve been sharing my experience with trading, what I do, and encouraging others to trade because I believe that trading is a great way to make extra money.
Recently, I saw a comment right underneath my video where someone said,
"Well, don't even bother because 95% of traders fail. Leave it to the professionals.”
Now, first of all, you know me... I wouldn't trust the professionals. What have they done to your account? If you had an IRA or 401K in the past few years, how has it been doing? Probably not too well.
So, why is it that so many traders are failing? And how can you be profitable when day trading?
Well, first of all, you need to understand that trading is a business.
Is day trading profitable? Yes! Here are three things that you need.
First of all, you do need money.
You need money to make money. If you don't have money to trade, trading is not for you.
Second, you need to have a solid, proven trading strategy.
You need to know exactly what to trade, exactly when to enter, and exactly when to exit. And also, how you limit your losses.
And we've talked about this in other articles.
Third, you need a broker.
Many people approach trading and think, "You know what? Let's try this."
And I think this is the completely wrong mindset saying, "Well, I'm just going to try it," because trading is a business and you should treat it as such.
The mistake that I see that many newbie traders make is…
They approach the market without the strategy, not having enough money, and also not having the right tools.
Think about this way.
You know I'm German, right? I grew up in Germany, and one of the famous sports in Germany besides soccer is Formula One. Race Cars.
Formula One is actually the most expensive sport in the world. Way more expensive than any other sport.
So, a Formula One racecar costs $15 million-dollars. And if you wanted to participate in a Formula One race, you couldn't. They wouldn't let you.
But let's just say for the fun of it, because when it comes to trading everybody is allowed to trade, right? Let's say the Formula One guys said, "All right, you can participate in a race."
Now here's what most people would do if I compare it to trading.
They would say, "You know what, I'll start with my car. And once I win some races, then I'll start investing in a Formula One car.
Well, what do you think your odds of ever winning a race are if you’re starting in your own car competing with $15 million-dollar cars? Slim to none, right?
And it’s the same with trading. If you don't have the right trading strategies, tools or money, how successful do you think you will be?
Is this making sense to you?
Because I thought about it this morning after I read the comment I thought, yeah... I don't know if this is true, if 95% of traders fail, because I don't have any statistics to back this up. I mean, it could be, could not be.
Who knows, but many people say 90% of traders lose money.
If you want to play the game of games... If you want to compete with other traders, you need to be prepared.
Don't bring a knife to a gunfight. This is what most aspiring newbie traders do, and this is why they fail.
Treat your trading like a business.
In order to run the business, you do need money.
And you do need to have the right tools because think about it, you're not only competing with me, you're competing with the smartest minds in the world.
You want to make sure that you have the best tools for the job.
My point is - be prepared when you get ready to trade.
This is because most people are not prepared enough.
And this is why they lose money.
If you want to compete in trading, if you want to participate in the in the game of games and make money with trading, make sure that you have money to trade, the very best tools, and a proven strategy.
If you're new to trading, check out my article on The Best Stock Trading Simulator