Business consultant and professional day trader David Chersonsky of Mesa Arizona has helped many people overcome their fear of day trading. Learning how to invest the right way is a process. And, as many already know, day trading does come with its risks. In the end, it all comes down to the relationship your brain has established with money.
The fear of losing money or any other prized possession is an ancient response to uncertainty. David Chersonsky believes that the root of this fear is self-preservation. That’s not a bad instinct to have. But, understand that making money in day trading boils down to your willingness to fight, retreat, or carefully pursue a particular company, option, stock, or bond.
Depending on what your life goals are, your definition of self-preservation may be a fierce determination to fight the fear of losing money, learning to take sound financial and market advice that signals when to buy and sell, then carefully pursuing those avenues on which you’ve done your homework and your heart-work on.
Instead of worry and angst over stock market conditions, David Chersonsky suggests avoiding these 5 investing myths that can lead to anxiety and fear of losing a lot of money in the short term.
David Chersonsky and Straight Talk for Beginner Day Traders
1. You can get rich by day trading
Day trading is not a scam, nor is it typically a get rich scheme. David Chersonsky wants everyone to know that the recent GameStop stock surge is not aligned with reality. When it was discovered that the market was possibly being manipulated by a large group of Reddit traders, Robinhood halted all trading in GameStop.
Those who devote themselves to learning everything about day trading and spend most of their time and energy researching their options can become quite wealthy. In the interim, they have likely suffered many losses also. So, rather than think of day trading as a way to get-rich-quick, consider it for what it is – a tool for investing that is a part of your total financial portfolio.
2. Day trading requires instinct and luck
Most trades will require some degree of luck, especially when it comes to timing. More importantly, a day trader should have a system that they use. A system of trading that has been tried, tested, and analyzed. But even the best laid plans for day trading can’t overcome economic factors, wide price fluctuations, and heavy trading that is beyond the control of any trader.
David Chersonsky suggests that all investors should be prepared for the upsides and downsides of day trading. Gambling in Los Vegas requires luck. Making money in day trading requires knowledge of market probabilities and learning the best strategies for success.
3. Successful day traders don’t share their secrets
To be successful at day trading doesn’t require insider information. David Chersonsky does believe anyone new to day trading should start with a financial advisor. You can a lot about the right mindset to investing in stocks and bonds simply by partnering with someone who is a successful day trader. It is true that in day trading, knowledge is power.You can have access to 99% of the knowledge you need to succeed by staying up to date on economic events that could directly impact your investments. Some market-moving events include:
- GDP announcements
- Natural or man-made disasters
- Interest rate decisions
- Unemployment numbers
- Mergers and acquisitions
4. The stock market is rigged against the small trader
David Chersonsky suggests that you not distinguish traders into large or small based on how much they invest. A better way to look at those who succeed or fail in the stock market is whether they are part-time or full-time traders. There is nothing wrong with starting with small trade while keeping your day job. This is the best way to learn the ins and outs of the stock market.
Of course, the more you invest, the more you can make – and lose! Of course, stockbrokers, clearing agents, and other institutions are set up to make their money on your investing habits. There are debates on both sides whether the market is rigged to generate wealth for a few, on the backs of many. The best advice holds true for both small and big traders – start early, buy low, sell high, and rely on long time frames instead of short timetables.
5. You need a lot of money to trade
And finally, you only need a lot of money to trade if you plan to buy and sell a large portion of high-priced stock. For day traders in the U.S., the legal minimum balance required to trade stocks is $25,000. But, this rule applies to a pattern day trader as defined by FINRA. The best way to avoid this standard deposit is to partner up with a day trader firm that can simply leverage your capital.
If you’re new to day trading, start learning all you can learn about financial markets. And more importantly, David Chersonsky suggests you partner with a financial advisor so that you avoid risking present income or future financial reserves set aside for college, retirement, or a new home.