I've learned a lot from graham stefan, i think, he's a great youtuber real estate, agent and investor and the stock market investor, but he's very wrong about day trading. If you've been following my channel for a while, you probably know i'm a big fan of graham stefan. I mean if you're, building a financial wealth, learning about investing in a real estate or stock market and enjoy somebody nagging at you for spending six bucks on starbucks. Of course, you would like him it's funny, because we both posted a video with lamborghinis in it for april fools this year, except i'm sure he's got some bowler friends who could lend him the lamborghini for free.

While i was a dumbass who had to pay three to four thousand dollars to rent it for a youtube video, but hey no regrets it was all for the sake of comedy, and that was the best three thousand dollars i've ever spent. So, graham stefan's video, i'm referring to here is this one: why 80 of day traders lose money which he posted in september of 2019.? So in today's video i want to talk about why graham steffen is wrong about day trading as a full-time day trader who's been trading in the u.s stock market for six to seven years now, this video is meant to be constructive feedback on the beginner trader's journey, Something that i have also gone through the same way many years ago, so we're gon na be discussing what graham did well on as well as the areas about day trading that he was very wrong about and, most importantly, how other new traders can learn from his Experience and his losses before we start make sure to drop a like or a scrim. Stefan would call it smash the like button, so in graham's video why 80 percent of day traders lose money. He describes his first experience with the stock market when he was still in high school and that's very impressive that he was already interested in the stock market in high school.

When i was in high school, i didn't know anything about stocks or money in general. I was too busy worrying about whether i should go to prom or not spoilers. I didn't go and have no regrets whatsoever. So, while in high school graham saw an online marketing ad for one of the biggest penny stock groups in the industry and that's what introduced him to day trading in a stock market and not just any stocks, we're talking about these trashy turd penny stocks that you Either love or hate with a passion, i'm not going to drop names here, but that was probably the exact same day trading marketing ad that i saw almost six or seven years ago, except i was in high school seven years ago i was most likely stuck somewhere In traffic on the 405 interstate, in los angeles, no joke - i lived in l.a for about a year or so, and i spent half of the time there in a car.

Okay! Sorry for that little detail that nobody asked about. But it's very interesting that we saw the exact same ad online, how to turn one thousand dollars into millions day trading, while sitting on the beach driving in the lambos and banking, on the toilet and coincidentally or not many traders. I know today will share the same lure the bait of promises, essentially that drew us to take the first step into this wild world of day trading. In a way, i feel really thankful.

I need to thank these day trading marketers in the video graham says that he had some early success with these penny stock picks online and made some small profits due to being lucky, and you know what we say about luck in day. Trading luck is not a consistently reliable strategy. In fact, beginner's luck is often a very dangerous start for brand new traders. It's very common for people brand new and entering the market to think that this day trading business is easy, buy low, sell high.

How hard can this day trading thing be, and especially with the glorified lifestyle marketing that we see on a daily basis, which i'm sure, you've probably seen a few on youtube? It's very easy to have that misconception. That day trading is easy money and a get rich. Quick scheme and that's why beginner's luck could be extremely dangerous. Imagine if your first few trades you made 100 500 or thousand dollars quickly if that worked for the first week for brand new trader, who wouldn't want to double down and quadruple their share sizes and use max buying power on all their trades the next week, and That's why, graham stefan mentioned in his video that, after the initial first few successful trades due to beginner's luck, he just had a series of bad trades after that, i'm not sure whether graham actually followed chat, room alerts to buy or sell.

Well, he just followed some other people's recommendations online on forums such as stocktwits and twitter, but the key here is that he followed other people into those trades. He bought those stocks that he has no idea about no plan of where the good entries are what the risks are and where should he stop out of his positions? If the trades worked against him and that's my friend is the biggest mistake, you could do as a beginner day trader following chat room alerts into a trade blindly, and i'm saying this because i've done the exact same thing as well, graham, isn't alone in making these Beginner mistakes - in fact, i hate to have to say this again. Most day, traders start out trading in the stock market by following chat, room alerts to buy and sell, and i'm sure many of you watching this video right now have done something similar in the past. Before too, let me know if you lost your rent money or your lunch money due to following someone else's alerts to buy and sell.

You guys all know what i lost lamborghini money and that's why i drive a toyota corolla. Today the gas is only 40 bucks. A month it's never had any issues in the past 15 years and i never had to worry about people breaking into my car. This is perfect.

Besides sharing his personal experience with day trading graham also talks about a few key points. Why day, traders lose money, and i do agree with most of them. The first and the most important one is because they haven't smashed. The like button graham says that most new traders are overly confident with their ability in the market, which i agree is very true, and especially when you got beginners luck like we talked about earlier.

He also talks about a few other reasons. Why most traitors cannot succeed? One is their inability to control their emotions, such as hope, greed, fear and regret, which i cannot agree more with the statement. Most traders lose not because they don't know how to trade, but because they don't know how to control their emotions. This is why a trader could be on a series of small wins and when one day hits the fan, they become emotionally attached to the trade and when they become too emotionally attached, they break their own rules of risk management and decide to fight the trend and Fight the stock, this leads to hope and hope which in turn leads to fear of taking losses and eventually that's how a small loss could become a big unrecoverable damage to the trading account see it's not difficult to make money in the market, but it's very difficult To keep it graham also mentions a very good point that most traders, especially when they're starting out with very little capital, they'll, be more likely to take riskier trades.

This is very true, especially when you're starting out with 500 or a thousand you'll be more likely to want to take trades that can double or 10x your money really quickly in order to justify the commission cost and the time you're spending in front of the market. Small accounts traders are more likely to treat trading as a get-rich-quick scheme. They will take risk management less seriously because they already have so little to begin with. What can they really lose right and that's the reason in my video how much money to start day trading? I recommend at least five thousand dollars to start with and treat that initial capital as a market tuition.

Five thousand dollars is an amount - that's big enough for most people to care about protecting if you value money and at the same time it's not big enough for the damage to ruin someone's financial future. Since most beginner traders are likely to lose 40 50. If not the entire account within the first six months to a year, i mean it's great. If you have fifty thousand dollars or a hundred thousand dollars or more to start trading, but please do yourself.

A huge favor do not use all that buying power when you're learning to trade. I certainly blew up a few of my first two thousand dollars or five thousand dollars trading account. Like i said in that video you have to be willing to pay market tuition in order to learn day trading. If you're not willing to pay some market tuition, then day trading isn't for you, it's just like college right.

If you don't want to have a five figure or six figure tuition bill to pay, then don't go okay. I really wish i didn't go to college. I could have saved that six figures for my day trading account instead, but the biggest issue i have with one of the reasons. Graham stefan mentioned as why 80 percent of all day traders fail is lack of diversification.

For those who don't already know, diversification means allocating your capital into various sectors, such as tech utilities, energy and investing in many different asset classes, such as stocks, precious metals or real estate. The goal of diversification is so you can spread out the risk and maximize your potential profits across all areas. Essentially, that means not putting all your eggs in one basket. Diversification is very important.

Yes, if you were investing, i think, graham steffen, being a long-term stock market and real estate investor really made the video analyzing day trading as a style of investing day trading is a style of investing. Most investors are over confident, investing with vesting and that just couldn't be any further from the truth. Like i mentioned in a recent video day, trading cannot be compared to investing day. Trading is a business.

These stocks are trading vehicles and would write in the intraday volatility to the upside or downside, we're not looking for long-term appreciation and value. Actually, i think it's great that, while intraday trading we're not too diversified and have our capital to spread out, because we as traders should only be taking trades and buying stocks that have a plus setups we'd only take the position if there's a trade there. So, that's why i think it's great not to be diversified in your day trading account unless you're hedging your position, then that's a different story. The last thing you want to do in day trading is to be in way too many positions, and none of them are actually your setups.

According to plan, remember we're not buying and holding for the appreciation and value here, we're just riding in and out of the positions and taking advantage of the volatility. This video is meant to be constructive and provide some insight from the perspective of a full-time day trader. I'm a big fan of graham steffen, and i really appreciate that he shared his experience trading penny stocks in the video. He did do something very well as a new trader in high school.

It sounded like he recognized very quickly that day trading is not a get rich quick scheme and he realized that his earlier wins were just beginner's luck and he simply didn't have the time nor the desire to continue on learning day trading, the proper way, which i Think is a very realistic reflection for most new traders to learn. Yes, he did lose most of his first trading account, but i think thankfully he was only in high school, so he probably started with a small account, so he probably didn't lose that much money. Another really positive thing here is that, after graham realized that day trading isn't for him, he didn't overstay to try to revenge trade and make the losses back, which, unfortunately, is what a lot of beginner traders tend to do and most cases they end up losing even More money again, i'm certainly not saying day trading is better than investing or the other way around. I'm just here to make it clear that day trading is not a style of investing it's a job and it's a business that actually requires a lot of learned skills over hundreds and thousands of screen time, while investing is something you can just casually hold on to Stress-Free over a long period of time and again, you can certainly do both at the same time like i do i'll leave a link to graham stefan's day trading, video in the description below make sure to check it out.

Thank you guys so much for watching. As always, i'm the humble trader and i'll see you guys next week, hey guys thanks for watching. I hope you enjoyed the video and the bad jokes if you want to see more day trading content, make sure to subscribe and follow me on twitter and instagram for more. If you'd like to trade with me daily and get my free weekend, watch list and trading journal make sure to check out the links below for more resources.

Stay, green, stay, positive and i'll. See you guys next time.