One of the best things we can use to grow in the world of trading and investing is learning about our own mistakes.
This statement, besides, is used commonly by those who populate the world of trading service providers, especially those who do some mentoring.
In other words, it is true that we learn from errors and that they are unavoidable if we want to become an experimented trader.
Learn day trading?
However, there is one problem here with this approach: it is the fact that day trader mentors do not tell you that no matter how many errors you have and how much you learn from them you will not win in the day trading game.
A lot of these mentors make people believe that with this kind of advice and the application of some “technical tricks” they will be able to success doing day trading in the financial markets.
Unfortunately this is not the case.
In other words, many of those mentors are lying purposely to the people, for the simple reason, as well, that they are not day traders themselves.
The problem related to day trading goes beyond any trading system, indicators, psychological tricks or gaining experience.
The problem with day trading is that it is almost impossible to win consistently doing so after 5, 10 or more years.
Learn trading mistakes
As I have said uncountable times, the costs and problems associated to short-term trading are so big that it is almost impossible for the typical retail trader to become a “professional trader”.
A lot of people fall in this illusion, including the one who is writing this.
Reality is other.
If you want to become a professional day trader you have better find yourself being employed by a broker itself, or better still open a broker yourself.
As opening a broker is not a simple and easy task, many of the wanna be day traders end up offering systems, courses, signals, etcetera.
Some of them will even become more or less legit but a great deal of them will be simply scams.
The best way to learn from day trading mistakes
The best way for us to learn from our mistakes doing day trading is to realize that the best thing to to is to dump day trading altogether.
Unfortunately this learning comes at a steep price, especially when people negotiate futures or big accounts.
When people fail and lose a big chunk of money, they go for the typical mentors so-called “professional traders”, or the vendor of systems.
This type of services has something in common: they are quite expensive, starting from 200 Euros or dollars and going up to 1 or 2,000 and more.
When you notice how many people provide these kinds of services, you realize that the way they make a living is out of these services not from their “professional day trading”.
In some way these service providers learnt from their errors and started to profit from them but not the way they say you can do.
This is why day trading is so popular, because it has a huge demand and offer.
Trying to make money investing in the long-term is not something very appealing.
However a “mother that makes 7,000 Euros a month trading” is a good calling.
Everyone knows that you cannot make that sort of money investing in the long-run but they are credible if we associate them to short-term trading.
Believe me, there are better ways of trading in the medium range, and those ways are achievable by a process of “try and error”.
Not many traders have been able to arrive in the markets and become experts instantly.
There are some markets though that shows us that they have a trend quite strong most of the time: for instance, stocks for the long side.
Once you understand this you can create a good trading system or investing, consisting in going bullish while using stop losses.
We could do this with other assets but it is not as easy.
We should not get carried away by advises that we can receive concerning the “success with day trading”.
That is why, when we see the hordes of mentors who promote it with things like this:
- Learn from mistakes
- Use stop losses
- Let profits run
- Cut loses short
- Create your trading plan
- Do not trade too much
We can say that we agree with it, that it is more or less true and advisable.
However, what it is not advisable is trying to apply it to the intraday markets and expect that you can make a living out of it.
This, in a way, is a Hegelian Dialectic.
In other words, you have a problem, you try to solve it and someone gives you help, but the reality is that the solution offered is false.
For the “help” to be credible it has to be applied to the “real markets” those that trend for the long-run.
Those principles are not bad, what is bad is day trading itself.