Let’s face it. Everyone’s heard about day trading, but what do you really know about this curious profession? Warrior Trading’s Ross Cameron, who’s spent over a decade building a day-trading portfolio worth millions, explains what trading truly is — and what it isn’t. Here are five takeaways from his new book, How to Day Trade: The Plain Truth. You should read Ross Cameron’s new book — but until you do, here are five key points in How to Day Trade: The Plain Truth.
1. Day-Trading Isn’t Gambling if You Do It Right, Says Ross Cameron
In How to Day Trade: The Plain Truth, Cameron admitted that anyone can open a brokerage account, fund it with a deposit, and start mashing the buy and sell buttons.
“Doing just this, in the hope of getting rich, is gambling. Let there be no doubt: some people gamble in the stock market. That does not mean that the profession of day-trading equals gambling,” Cameron wrote.
So, what does Ross Cameron think separates the professionals from the gamblers?
“The closest legitimate comparison to day trading and gambling would be when we look at a professional card counter at the blackjack table or a professional poker player. Both are highly trained and highly disciplined people. They know with a fair degree of statistical confidence when to hold ’em and when to fold ’em. “With strategy and discipline, they can actually push the odds for long-term success in their favor,” Ross Cameron explained.
“Day-trading is very similar in this way. Those who approach trade with strategy and discipline have the best chance of pushing the odds in their favor. I do think there is a certain amount of beginner’s luck out there. I attribute this to the confidence that can come with being incompetent.”
“The beauty of day trading is that there are several steps you can take to affirmatively reduce your risk,” Cameron shared. By first reducing your risk, you can begin the process of developing strategy and discipline in a safe environment.
2. There Is an Element of Luck in Day-Trading, But It Only Gets You So Far
In his book, Ross Cameron recounted the story of his friend who made $16,000 while in high school.
“That sort of trading is luck,” recalled Cameron. “And in his case, it was beginner’s luck.”
His friend’s win wasn’t the culmination of strategy and discipline. He heard something, placed a trade, and it paid off.
“But it was a fluke, as represented by the fact that he’s not still trading today,” wrote Ross Cameron, admitting he does think there’s a certain amount of beginner’s luck in trading. But he attributes it to the confidence that can come with not knowing what you’re doing.
“It’s the blissful ignorance of risk that leads some beginners to inadvertently take high-risk positions. If they pay off, it’s beginner’s luck,” he said.
But luck works both ways.
“Over the long haul, luck plays less and less of a role in day trading,” Cameron warned. “The real practitioners tend to stay in the business, and those who rely on good luck or hot tips tend to get washed out.”
3. Day-Trading Isn’t Safe — and It Isn’t Easy
Day trading isn’t a sure thing. “Don’t let anyone tell you otherwise,” cautioned Ross Cameron. There isn’t a simple way to simply jump in and start making money. There’s no easy formula for success. There’s only hard work, coping with losses, and working out why things went right when they did (and tweaking that strategy as you move forward).
“I can’t predict the future of artificial intelligence and other technologies, but from where I sit, day-trading is always going to involve risk,” wrote Cameron. “At a fundamental level, you are trying to predict what a bunch of strangers and algorithms are going to do in the next few minutes. You can apply a great deal of experience and risk-mitigation techniques to lessen that risk, but it will never entirely go away.”
4. Ross Cameron’s Warning: Day-Trading Isn’t for Everyone
Early on in his book, Cameron tries to put his readers straight: Most people aren’t cut out to be day traders.”
“Many people who try to day-trade come into the profession with severely inaccurate impressions about what it takes to day-trade successfully,” he wrote. “Some believe having a fancy financial background or exceptional intellect will make them more likely to succeed. Others think it’s just a matter of hanging out on social media and jumping in on the next ‘meme’ stock.”
Even if everyone had an accurate impression of day trading, most people wouldn’t be willing to put in the time to get good at trading, the Warrior Trading founder believes.
“And those who are willing to put in the time may not have the aptitude to be a successful trader,” he added.
5. Day-Trading Can Be a Great Way To Live
As much as he tries to put people off day-trading as a career, you can tell from his book How to Day Trade: The Plain Truth that Ross Cameron truly loves his profession and wants people to join it and be successful. He just wants people to approach day trading with their eyes wide open.
“I wrote this book to bring real-world clarity to that sensationalized reputation surrounding day trading. “You are going to see throughout this book that I will be very blunt with you, and here’s the first instance: Day-trading is like a magnet that strongly attracts some people and strongly repels others,” Cameron wrote on Page 2. “The problem is that it often attracts the wrong people and drives away other folks who might be great at it if they only knew the facts. I will fix that in these pages.”
So, what does Ross Cameron’s new book teach us about day trading? It isn’t gambling if it’s done right. There’s an element of luck to day trading, but it only gets you so far. And although day-trading isn’t for everyone, for the right people, it can be a great way to live.
Disclosure: This is sponsored content. Sponsorship may include but is not limited to, payment for article placement for publication, compensation to the writer for their time, or other arrangements.
Disclaimer:
The content of this article is for informational and educational purposes only and should not be construed as financial advice or as a guarantee of success in day trading or any other form of investment.
Day trading involves substantial risks, including the potential for significant losses. Results can vary greatly, and past performance is not indicative of future outcomes. Readers are encouraged to conduct their own research and to consult with a qualified financial professional before making any investment decisions.
