How to Become a Day Trader

Series Summary

Personal finance is the application of financial principles to the monetary decisions of an individual or family unit. It addresses the ways in which individuals or families obtain, budget, save, and spend monetary resources over time, while taking various financial risks and future life events into account. Components of personal finance might include checking and savings accounts, credit cards and consumer loans, investments in the stock market, retirement plans, social security benefits, insurance policies, and income tax management. In this free video series on personal finance, learn about investing from a futures and options floor trader. First, he discusses becoming a day trader, buying and selling mutual funds and becoming wealthy. Next, he talks about how bonds, mortgage backed securities and Roth IRA's work. Finally, learn about different ways of investing money and buying stocks directly from companies.

Video Transcript

"Hello, my name is Mark Griffith, and this is going to be short introduction into how to become a day trader. The first thing you need to know, is that you're likely to lose money. Day trading is very, very risky, so rule number one, don't invest anything you're not prepared to lose. So we could be talking about two, three, four thousand dollars, and if you're happy to say, if after six months all that money is gone, you at least tried it, then go ahead. Don't try to day trade with money that you cannot afford to lose. Second, of course, is learn as much as you can about it. Learn the special language, learn which advisers there are, which gurus there are, but don't take anybody's advice as religious. Remember, everybody's talking their own book. Everybody is trying to promote some scheme of their own. So the people who say that the market is going in this direction, have a reason to want it to go in that direction. And it doesn't necessarily mean that they're con men. It means that they sincerely believe things are going that way, and therefore that's how they see the figures. That's what they see in the data. Similarly, people who think the market's going to go the other way, sincerely, believe it's going to go the other way, and they see what they want to see. So, you should always come to your own assessments of what the market's doing, put together different bits of advice from other people--but think, why are they saying that? Do I agree with them? What's the basis, what's the evidence, what's my evidence? One of the best things you can do if you know somebody, if you have a friend or an acquaintance who day trades, and they're successful, ask if you can sit in on a session with them. It's not for people with weak stomachs or weak nerves, because you can lose money very fast. So, first of all, try to watch some day trading. Try to sit and watch the market without actually putting your own money on it. This is called paper trading. And be disciplined. Be honest with yourself. If you said, at three minutes past eleven, oh I'd buy ten of those, then right it down so that you can't pretend later that you didn't really say that when the price goes down, not up. So with your paper trading you have to be disciplined, check what you did, write everything down, see if your hunches really are borne out ten minutes, twenty minutes later. And if you've done all that, you feel confident, you have your online broker, you've seen a little bit of it in action, and you are ready to lose it if necessary, without panicking, without feeling sick, then go ahead. Start small, be careful, try your best, but don't expect to get rich quickly. Good luck."