by Manny Backus, Day Trading Strategy Expert
For the casual day trader, a trading club is a great idea. It gives you a chance to exchange ideas and gather information. Professional traders almost always sit in a room with other traders, constantly shouting out ideas and sharing news. These are just some of the benefits of joining a day trading club.
Imagine sitting in a room with people from all walks of life, as well as other countries, who have gathered together to learn about and begin the process of day trading. The whole idea of a trading club is to become knowledgeable about day trading, learn how to build confidence in yourself as a day trader, and to learn from each other as well. Whether you are new to day trading or not, having someone in the group who may have expertise in one area, while you may have expertise in another is a perfect way to incorporate ideas through this type of networking.
While the reason you have all come together is to make money, it is also the camaraderie that exists between all of you that will yield positive results. In addition, the leader of the group is the experienced day trader, and is there to teach and offer invaluable lessons on how to day trade and be successful. Further, bringing a group of investors together minimizes the risk because more stock can be purchased as a group than as a single day trader.
Perhaps you have seen paid ads on TV wherein a group of four people are sitting around a table using a new form of stock trading software. Regardless of whether or not they have been successful, the point is they are constantly engaging each other in conversation about a particular stock, asking questions, seeking advice, and ultimately choosing a stock they all determine is the right one.
Joining a day trading club offers you a larger network of people who can also, through discussion and debate, make the right choices that will yield positive results. Due to the leader’s ability to keep them well informed using the latest tools and resources, members of a day trading club are more informed than the single trader since there is a plethora of information available to them and through their interactions with each other.
While day trading clubs are not at all a new genre, they are also not required to register with the Securities and Exchange Commission. Ensure that you check this out before joining any day trading club. After all, you certainly want your investment protected. Also, inquire of the club how much you will need to invest. Once you have these answers, you will need to ask yourself some very hard questions. Can you afford it? Will investing tap into your savings or college tuition? Will you be able to cover all family and household expenses? Further, how do you handle losses? If you become too stressed out or anxious or have a preconceived notion that you will be rich in a matter of minutes – you are only fooling yourself. It takes time and knowledge to be successful in day trading.
The best advice experts offer in ascertaining if joining a day trading club is right for you is to thoroughly check your finances. Do you owe any money? What is your credit score? These are typical questions you would address when beginning any type of business venture.