[Music] In today's episode, we're going to bust some myths and misconceptions about day trading, starting with myth number one, which is that you need a background in economics or finance if you're going to find any success as a trader. This is simply not true. In fact, I think that some people who have a background in finance or economics are actually at a disadvantage when it comes to trading because when we're trading, what we're specifically focusing on is pattern recognition and trading the price action that's right in front of us. Sometimes people with a business degree, an MBA, something like that, they start applying all of this fundamental reasoning to their trading. They start looking at the balance sheet of these companies and saying, Oh, it doesn't make sense that the price is this high, and yet the price keeps going higher and higher and higher and higher. We look at some of the stocks that have made incredible moves like Tesla or Nvidia, and a lot of people who are really deeply rooted in business

economics. And you know, this kind of like deep Finance, they think this doesn't make sense. It doesn't make sense. And it's the active Traders like you and I who are just focusing on the technical patterns who end up doing so well. So is a background in business economics or Finance necessary? It's not necessary at all. And if you have that background, you may need to work a little harder to kind of separate some of those philosophies from active trading in the market. Myth number two: day trading is gambling. And here's what I'll tell you about this: for some people, day trading is gambling. Here's the difference. It's gambling when you don't have a strategy, you don't have a set of rules that you follow, and when you're not consistently profitable. So if you're losing money hand over fist, then you are essentially betting on a game of chance because you have no consistency. But once you have a strategy, once you have that system, that set of rules that you follow every single day, you are taking chance out of the equation. I don't feel like

I'm gambling. I have a system and a strategy I follow every single day, and that gives me the consistency that you see in my track record. So for me, day trading is not gambling. For someone who is a semi-professional professional poker player, poker is not really gambling for them at that point because of the strategy element. When you have a strategy and that gives you an edge, that's where it shifts. The problem comes from the fact that many people go to the casino and are purely gambling. They are just playing games of chance. They have no strategy whatsoever, and that's fine. Many people come to Wall Street and they are just gambling. They're putting a little money on this, a little money on that, and they have no strategy. So for them, it is pure luck. But for people that make a career out of this, like myself, people who do this for 5 years, 10 years, 15 years, 20 years, you don't build a career gambling. You don't build a career just on luck. This is where strategy comes into play. So myth number three, day

trading is all about luck again. This ties in with gambling. It's not about luck, although I'll say it doesn't hurt to be lucky, and I won't discount the fact that there will be times where you're in the right place or the right time, and there is some degree of, well, I guess that was lucky that I happened to catch this trade, that I happened to be sitting here in this moment. But if it falls within the rules of your strategy to sit down every single day at this time of day and to leave at this time of day, then anything that happens within that time frame, to consider it luck that it happened. Hi, I don't really think so, you know? I don't really think of it that way. I feel very fortunate that I was able to capitalize as well as I was on GameStop. You could say that that was lucky, that I had already matured to a point in my career that when GameStop happened, I was able to make nearly a million dollars just that week for my

best week of my entire career and my best single trading day of my career, which I still, by the way, have not beat. So some of that, you know, just the luck of being at the right place at the right time and this and that. I feel a little bit of luck, perhaps that I just have maybe the natural aptitude to be good at trading, but the actual success of trading, you can't bring it all down to just luck. It just isn't like that. It really comes down to strategy, skill, and ultimately discipline. Myth number four: you need to have a lot of money in order to be a day trader. This is not the case. I have proven this with my small account challenges where I've traded with as little as, well, I guess it was about $583 in the account, and I grew that account slowly but surely up to $2,500, then to $5,000, to $10,000, to $15,000, to $25,000, and so on. It can be done. Now, my, of course, results are not typical, but I

think the really important thing here to recognize is that if you give someone a lot of money, will that make them a successful trader? The answer is no. So, money is not really the thing that is going to make it or break it. Money is just a tool for someone that has the skill. It is a necessary tool, but you can learn the skill without a lot of money. So, how can you do that? You could be watching episodes just like this. You could be reading books. You could be going through classes. Listen, the market has never been more accessible than it is today. On your phone, you could open an account with Robin Hood or ThinkorSwim or whatever it is. You could fund the account with $10 and you could start trading fractional shares. You're not going to make a lot of money during that process, but you can gain a lot of experience. And then, when you get to a point where you have experience, you have a track record of consistency, then you're going to do anything and everything possible to start funding.

that account with enough money to actually trade. And I've seen people do all kinds of really creative things to be able to build their first account, whether it's buying and selling things, flipping things on Facebook Marketplace, or working sort of side hustle jobs like Uber, Lyft, things like that. I mean, when you really get motivated, you'll find a way. So I want you to know that right now as a beginner, don't let money be the obstacle that stops you from learning. You can gain financial literacy, you can learn more about the markets, and you can start learning how to trade without putting a lot of money on the line. Myth number five, Ross. I thought you need $25,000 in order to day trade. Yes and no. It's a myth that you need that in order to day trade, because there are two things that you could do that allow you to day trade anyways. Number one is to trade in a cash account. If you trade in a cash account, you can day trade as much as you want, but when you run out of the money, you have to

wait until that trade settles. So, if you have a $500 cash account, you could trade the full $500 every single day. If you have a $25,000 margin account, you can day trade an infinite amount. So, once you're over $25,000, the amount that you can day trade is infinite. But with a cash account, you can day trade, you're just restricted based on how much money you have. Now, over the years, a lot of traders have gone to international broker-dealers if they want to day trade the US market with margin and leverage and they don't have $25,000. This has always been something that for a long time traders have done. It carries with it some degree of risk because if you open an international brokerage account, you're not protected by US rules, US insurance, and things like that. So, when I open an account with Robinhood or thinkorswim or any of these brokers, I'm protected with deposit insurance, my money is protected. If you open an account in the Caribbean, well, you don't

have that same level of protection, so there is some risk there, but there are many traders who do use those accounts, and I've used them in my career because, again, I considered it a tool. This was an account that allowed me to day trade a lot more quickly than if I was just using a cash-only account, so it was a choice to use it. I do pay a higher fee with those accounts, and they know they've got the market kind of cornered, so they charge you a commission on every trade you take. But if you're in a position where you've already proven you have a track record of consistency and you know what you're doing, then my thinking is that I'm going to use this tool for a limited period of time until I've built my account up to $25,000, and then I'm going to move that money into a US broker, and I'll be able to trade unlimited as much as I want. So it's a myth to say you hard and fast need $25,000 if you're going to day trade.

myth number six you need to be a US resident to trade the US market. That's not true. We have traders from all around the world who trade the US market because of the volatility, the volume, and the liquidity that we have in this market. So I know traders who are in Japan who stay up later at night to trade the US market even though there it's like a 12-13 hour time difference. We have traders who are in Europe who are 6 hours ahead of us who trade the US market. So they're trading from 3:00 p.m. until 6:00 p.m. 7:00 p.m. their time when it's morning here. That's fine. The reason they're trading the US market instead of their local market is because the US market has more volatility, volume, and liquidity. And because it's such a big market, there's a lot of tools that have been built for active traders in this market. For instance, all of the stock scanners that I use, all of the

news feeds all of the charts those are all for the US equity market. So think about all of those different businesses that have been built, including my own, that are all revolving around the US market in the smaller exchanges of local markets where you may live. If you're an international Trader, you may not have all of the tools and resources that we have here on the US market. So traders in Australia, they trade the US market. Traders literally from all around the world. So you do not need to be a US resident to trade the US market. Now one of the things that is cool is if you open an account with a US broker dealer, you can make money in US Dollars and then convert it back to your local exchange. And so you may also have a benefit there just from the currency. Now there are some Brokers that may allow you in your country to trade the US market. So there's not as much of an issue there with currency, but it's just something for you to research and a possible added benefit with currency.

exchange rates myth number seven you can't day trade and work a 9-to-5 job at the same time not true. I'm going to reference all of my students and our members here who are trading from California or trading from the West Coast. So the New York Market opens at 9:30 Eastern Standard Time. That's 6:30 in the morning out on the west coast. So on the west coast, if you don't mind getting up early, you could trade the market and then go to your regular 9-to-5 job. Traders who are in Europe, you could have a 9-to-5 job and you could start trading at 5:00 in Europe, which again, you go back, it's 11:00 a.m. here in the E on the East Coast. You could still get the whole morning and afternoon of trading. Traders who are in Japan, you could be trading, you know, from whatever 6 o'clock at night, 7, 8, 9:00 in the evening, that would be fine.

traders who are on the East Coast, they're going to have a little bit of a harder time. But here's the thing, the Market opens at 4:00 a.m. Eastern Standard Time for pre-market. Now, although there's not a lot of volume pre-market that early, you could start trading at 6:37 a.m. and still have time to get to your 9 to-5 job by 9:00 a.m. So for those who are really motivated, you can do both. So, myth number eight: the market is only open from 9:30 to 4:00 p.m. That's not true. The market officially is 9:30 to 4 p.m., but premarket begins at 4:00 a.m. Eastern Standard Time and after hours goes all the way till 8:00 p.m. So you actually have a very long day. Now, I'll tell you that between 7:00 and 8:00 p.m., typically there is very light volume.

volume the most volume tends to be between the hours right now of about 8:00 a.m. to 10:00 a.m. so I like to trade. During the period of time when we have the most volume because I can move in and out of the market with larger positions, and that allows me to make more money. A certain amount of how well you do will be based on how many shares you can buy. SO trading during the time when you can buy more shares allows potentially the opportunity to make more money. However, at 4:00 p.m. when the traditional closing bell rings, that's when companies are often posting their earnings, so we often see some really nice volatility between 4:00 p.m. and 6:00 p.m., but it starts to sort of wane as you get closer to 8:00 p.m., and I think the reason is because if you make a mistake, you know with 5 minutes before the market closes for the day, there's no chance to recover, so people

kind of cool off. So traditionally, the morning has been the time where we've got the most opportunity. 4:00 a.m. you know, for traders that are in Europe, that's only what, 10:00 in the morning. So you could trade from 10:00 a.m. on till 2:00 p.m. And you're just trading from 4:00 a.m. to 8:00 a.m. Eastern Standard Time. That would work, that's totally fine. So we've got a large enough window of the market being open that you can trade. Now we talk about the market eventually becoming a 24-hour market. Whether or not that happens, I don't know. But even if it does happen, just like in the crypto markets, there will be times within the 24-hour cycle where we just see more volume, more volatility. And when you have moves that are outside those windows, they're usually not going to be on enough volume or liquidity that you really could have made even that much money trading it. So you end up

disregarding it so even if it becomes a 24-hour market, there will still be Windows like between 8:00 a.m. and 10: a.m. and between maybe 3:00 p.m. and 5:00 p.m. where we have more volume and volatility. Myth number nine: you cannot day trade in a retirement account. That's a myth, that's not true. I day trade in a retirement account every single day, and here's the reason: it makes all of my day trading profit completely tax-free. Now, this is something that's a benefit to us traders specifically, but you can set up a traditional IRA or a Roth IRA, and if you do that, all of your profit will be tax-free if it's a Roth IRA, and the withdrawals are tax-free as well when you take the money out at age 59 and a half years old. So, this is a very popular strategy that people have, especially for those that have multiple sources of income. So, if you already have, let's say

your a freelancer. You've got an LLC. You've got some income from that, or have a W2. You're a regular 9-to-5 employee. Well, in that case, all of your income is already taxable. So making more money is great, but naturally you'll pay more income tax on that. But what if you could set up a retirement account? Even with just $5,000, you start day trading in that. You grow to $10,000, no taxes. You grow to $20,000, no tax. $50,000, no tax. I took an $188,000 Roth IRA and I've grown it to over $6 million tax-free. This is huge. So I think it's a huge advantage to day trade in a retirement account. However, I will caution you against taking your retirement nest egg and trying to day trade with that. I would set up a separate Roth IRA account to use for trading because day trading is speculative. It is riskier. And so you don't want to make a mistake with your

nest de always make sure first prove profitability in a simulator before you trade with real money. And take it slow. Myth number 10: day trading is easy money. Now I wish it were true, but it's really not true. Now I know that it can feel that way when you're sitting on your laptop on the couch. You press a couple buttons and you're up $3,000. But easy come, easy go. As quick as that money can be made, it can be lost. So money can be made and lost very easily. Being a consistently profitable day trader, that is difficult. That takes a tremendous amount of time to build a skill, to develop a strategy, to backtest it, to test it in a simulator before finally scaling up with real money. And you have to do that very slowly. So success does not come overnight. Day trading, this is not easy money. Again, compared to doing manual labor, the money can come a lot easier. But again, easy come, easy go. So pay your dues, take it slow, and don't come into this thinking it's

going to happen overnight. Myth number 11: Day Traders make money every single day. That's not true. This is not a 9 to 5 W2 job where we clock in, clock out, and we get to, you know, get a paycheck for every day that we show up. You will make money on some days, and you will lose money on other days. In fact, for me, I'm green about 80% of my trading days, which means one out of every five days is a red day for me. So, I figure that I'm going to have roughly four red days each month, which means I'm gonna have, you know, 48 plus or minus red days each year. That's a lot of losing. But being a successful Trader means being really good at losing, knowing when to hold them, when to fold them, to use a little expression there, but really most importantly, Knowing When to Walk Away. That's part of your Edge, that's part of your strategy. You have to mitigate your downside risk. So, when you start losing, you have to recognize that

and be like, No, okay, this is a day where I've got to walk away. I've got to follow the rules of my system and not overtrade on this type of day. And on the other hand, on a day when the Market's really hot, that's a day to trade longer, to lean in, to be more aggressive. So, this is how you amplify the hot streaks and then keep the cold streaks like really as much to a minimum as possible. This is something that it really takes time to develop. And for people out there that just want the consistency and predictability and stability of a 9-to-5 consistent paycheck, you're just not going to find that in trading. And this is not only true on a sort of daily level. Some days are better than others, some months are better than others. In fact, some years are better than others. So, it's possible to have a year where one year you make, let's just say, $200,000, the next year you make $500,000, the next year you make $300,000, the next

year you make a million. The next year you make 200,000. I've had years like that where it goes up and down, up and down, and that's sort of just the aspect of trading that is out of our control. We can't control it. The market will give us what it gives us, some years, some months, some weeks, we have incredible opportunities, and we can do incredibly well, and other times it gets a little cold, and that's just the EB and flow that it's always been as a Trader. And I suppose that's not a whole lot different from anyone who's self-employed, you know, sometimes business is great, sometimes it's slow, so you always got to save a little for a rainy day and just try to go with the flow. Now, having said that, it's also important to recognize when there are bigger shifts happening, and you have to be able to adapt your strength strategy and pay attention to the experience other people are having around you. Is your strategy changing? Is the market changing? Is there a shift that I need to

make in my own trading to adapt accordingly to these changes that are going on myth number 12. Trading is only for the wealthy. I disagree with this. I think that it is a probably a true statement that most people who are trying to day trade have some disposable income just given that they they have the flexibility in their time and schedule to spend time in front of the market that they have the ability to afford a computer an internet connection and things like that. So I I think that there is some degree of day trading maybe being more popular among people that have some degree of privilege. At the same time of course you can trade on a mobile app on your phone or you could at least start learning about the market by doing that. And when I started trading I certainly wasn't wealthy so you know I don't think that you should think of day trading as being just something that wealthy people do or that's reserved only for people who are wealthy cuz I've known a lot of people who were not.

wealthy when they started trading, and they were able to move up the ladder to find themselves in a position of wealth because of the profit that they made trading. So the things that you need to really get yourself on that first rung of the ladder, so to speak, more than anything, is dedication, discipline, and drive. If you are motivated to better your life, to learn more about the financial markets, to gain financial literacy, that's only going to benefit you in the future. So, I think that there is a path in the market to move up the ladder. Now, things like real estate, for instance, the barrier to entry is a lot higher to make your first down payment on a property, to get a loan, that has a real threshold that a lot of people are going to struggle to get to, especially if they begin, you know, in their late teenage years by establishing poor credit because they, you know, are late on bills and things like that. It can be very hard to start, but with the market, you can jump in with

lower stakes with a smaller account, break the ice, and start gaining experience. So, I don't think trading should be considered something that's just for the wealthy, and I think that Robin Hood, with their kind of, you know, slogan of making the market more accessible and making it, you know, just available to everyone, I think that that has had a profound effect. I mean, since then, commissions have disappeared, all these brokers are now commission-free, so they want to make trading more accessible, and I think they're doing a decent job, at least, um, making it seem that way. You know, again, it's, you do have to have a certain amount of certain skill and aptitude to find success, but to get started, it's not money that should be the obstacle, it's dedication, discipline, drive, and whether or not you really want to make this happen. Myth number 13: Men are better traders than women. This is not true. While it is the case that there are more men who are in the market, stay trading than women, it's not because men have any advantage over

women, women. The market doesn't care what your gender is. It doesn't know, and it doesn't care. You will be rewarded if you are good at finding stocks to trade, at choosing good entry points, and at managing risk. We know that trading is a high-risk activity, and we know that men tend to engage in more high-risk activities. That's why our insurance is more expensive when we're driving cars or motorcycles or anything like that. We tend to take more risks for whatever reason that is. I don't know, but I think that may be why there are more men that are in the market trading. And we know that the success rate of traders is low, but I want to think that I almost wonder if anyone knows if women actually have a higher likelihood of success than men because the women that come in are more maybe keen to risk and more dialed in. I don't know the answer to that, but it's not true that men are inherently better at this than women. I mean, there's nothing to

support that claim, but a lot of people have this sort of impression of the financial markets being this sort of boys club. I don't like that because the market does not care as long as you have a system, a strategy, a set of rules that you follow. That's what matters at the end of the day. Myth number 14: the markets are rigged and you will always lose. This is a tough one, so there is some truth to this as there's some truth to a lot of myths. It's true that there are some components of the market where you really don't stand a chance. Both market makers and high-frequency trading algorithms have that area of the market really locked down. Retail traders like you and I, we're the little fish and we're going to get eaten up. But there are other areas of the market where we can do very well. There are of course whales in the market, and as little fish, we can ride the wake created by these whales. We can also seek opportunities to capitalize on.

short-term volatility that's created when a company puts out breaking news. So these types of things, uh, breaking news, seeing the volatility created by big movers in the market. These are things that we can do as retail traders, so as long as we know our lane and we stick within it, I think we can do just fine. I think that it's very negative just to say the whole market's rigged because that's not the case, that's just not how it is, but there is some truth to the fact that high-frequency trading algorithms are trying to take money from other traders, so you know, it's always a battle, but that's how the market has always been. And again, as long as you have a system, a strategy, and a set of rules, then you can come out of that battle on top. Myth number 15: you need to have a license or pass a test in order to open a trading account. This is not true. If you want to trade with other people's money, you need to pass a test.

and that's if you're going to work at like a hedge fund or a prop firm or something like that. But if you're trading with your own money, you don't need a license. You don't need to pass any tests. You can open an account. You can start trading today. But again, caution you on doing that until you first establish a track record of consistency and profitability. But the nice thing with the market is it's accessible. You don't need a special license. It's not like becoming a realtor or something like that. You can open an account and you can start trading just like that. Myth number 16: day trading is a scam. That's a blanket statement and I know some people feel that way. They'll feel really discouraged when they try to trade. They don't find any success. They'll feel like the Market's rigged. It's just everyone's out to get me and it's a scam. No one makes money and that's not true. There have been people who have been making money trading for a

long time. Day trading and trading online really has its origins in the late 1980s, early 1990s, gained a huge amount of popularity. Then we have the dot bubble that burst around the around 1999, 2000, and then again people came back into the market, picked back up. And then we had the Great Recession 2008-2010, and then we came back up, and big peak in day trading in 2020-2021, GameStop, everything else. So day trading has come in and out of popularity over the last 30 years, and the reality is most people who come into the market to day trade end up losing money. And they lose money because of one of two reasons. Number one, they are just gambling, they're just guessing, placing bets more or less on stocks they think might go up, but they don't have any strategy. So you have a strategy, you have a set of rules, you're not gambling. And then number two, people fail because they don't have the discipline to follow the

their own rules that they create for themselves, and then they basically go back to gambling. So, as long as you have that system, strategy, set of rules, and the discipline to follow it, that's going to be the big difference between you and pretty much everyone else out there. Now, whether or not you are going to find success will also depend on a number of factors: your own aptitude, your skills, your ability to make decisions quickly, and then to a lesser extent, the tools you use, the broker that you're using, and things like that. So, I understand that for some people who get really frustrated, it's easier for them just to think of this as like the whole system's rigged, rather than look in the mirror at some of the reasons that they're not succeeding. And I'm going to be honest, I never made it to Hollywood, you know. I never became like a Brad Pit, and I could say Hollywood's a scam, you know, but maybe I should look in the mirror and be like, I'm not, you know, I'm not, I'm not a

leading actor face. You know I, I'm not, I don't have that skill like it's me. Let's be real, it's me. I can accept that, right? But I think for a lot of people, it's hard, and it's easier rather than taking personal responsibility to just project outwards and say no. You know what, that whole thing is, I'm going to write it off. So, you know, if you're one of the people that have been kind of in that camp, I encourage you to sort of think a little bit more open-mindedly about this because day trading works for a lot of people. So, the question is, what are they doing right? What are they doing that's different from what you're doing? And if you could list those things and then you could bridge the gap, well, that would be really interesting to see what happens. Myth number 17: You can make money following trade alerts. I am not a fan of this at all. There are a lot of people out there that issue trade alerts. Some of these people, you'll see them on

CNBC. You know, these Talking Heads, you can go to their websites. They have trade alerts there. You'll get them through text and email. So, whenever they buy a stock or options or whatever it is, you'll get the message that they bought. And the idea is that you just pay for the trade alert. All you have to do is blindly follow the trade alert and you'll make money. It's easy as that. Well, remember when I said day trading is not easy, it's not. And just following trade alerts doesn't work. If it worked, of course, everyone would do it, but it doesn't. I tried it myself and I was not successful with it. I tried it because I wanted to make money in the market and I didn't yet have a strategy. So, I was like, well, this will, this is a starting point. And although I guess I could say for myself I did learn some things through that process about the flaws and trade alerts. I also learned a little bit about different strategies people were trading. But nonetheless, you don't make money.

following trade alerts 'cause here's the problem. If they alert a stock and they have a great entry and they're totally right, by the time you get it, the price has already gone up. So their winners are always going to be bigger than yours, and that's just the way it is. So, you know, I'm really more focused on teaching you how to fish. Now, it may be the case that we're both trading the same stock because the stock is up 500%. It's the leading percentage gainer in the entire market. So maybe we're both looking at the same setup, and that's fine. There's millions of people trading the market, but I want you to be able to take that trade because you've learned the reason to buy, you understand where to set your stop, how to manage risk, and you know what your profit target is. So that's the benefit of really learning a strategy that's being traded every single day by someone else. So in this episode, we've talked a lot about the importance of

strategy system and sets of rules. If you'd like to download mine, I'll put a link in the description for my small account strategy. You can download it, you can print it out, it's PDF. You can have it next to your desk and you can start learning how to trade the markets the way I do. As always, it's no guarantee you'll find success, but hey, it's a great starting point to work from, a strategy that is being traded today by other Traders, me, thousands and thousands of other Traders all around the world. I am a momentum Trader. I focus on trading the trend. So if you want to learn more, check out that link Pinn in the description, top of the comments, and I'll see you for the next episode real soon. [Music]

17 Day Trading Myths in 30 Minutes (Don't Fall For These)

Ross Cameron is best known for turning $583.15 into over $10 million day trading. His results are NOT typical. Most day traders lose money. But Ross isn't an average day trader. Here on YouTube you can learn from Ross. We hope you enjoy it!

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17 Day Trading Myths in 30 Minutes (Don't Fall For These)

17 Day Trading Myths in 30 Minutes (Don't Fall For These)

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