Education is key to successful day trading, and there are a wealth of education options online. Whether you want specific forex, futures or cryptocurrency training for advanced traders, or a free ebook for beginners, we explain how to find the best educational course for you and your needs.
Day trading is a vast subject that may seem overwhelming to potential traders. The truth is trading is complicated; there are no shortcuts or get-rich-quick schemes – and don’t believe anyone who tells you otherwise.
However, that doesn’t mean you can’t make money from day trading. It just means that to profit from trading you should also profit from the experience and expertise of others. Investing in the best day trading education can equip you with essential knowledge, a valuable support network, and can set you on the path to trading success.
Here, we’re going to offer some pointers that’ll help you choose the right online day trading education for you. None of the services available can replace you learning ‘on the job’ – trading and building experience yourself – but they can work alongside your own trading to help inspire and improve your skills.
If you aren’t already trading and are looking for the best day trading education, it’s a good idea to think about what kind of trading you want to do. Are you interested in trading options or futures? Do you want simple shares or intricate indices? There are plenty of options available:
The most well-known form of trading. This involves buying and selling shares of different companies through a stock exchange. Our stocks page can help explain which stocks are best suited to day trading – ultimately, you volume and volatility.
Most stock trading education materials will revolve around ‘buy and hold’, longer term strategy – based on company fundamentals and value. Day trading stocks relies more on price action. So learning about technical analysis is more important that company analysis.
Forex is a hugely popular form of trading, with billions traded daily. Short for ‘foreign exchange’ , forex trading is speculating on whether one currency will become more or less valuable than another.
Commodity trading is where you trade in things like precious metals or the raw materials that make other goods. Commodities are divided into two groups: Hard commodities are things that are mined (gold, oil etc.) Soft commodities tend to be agricultural things or things that are grown (wheat, sugar etc.)
Cryptocurrency requires a greater level of education than most at present, purely because the product is so immature. You’ll have heard of Bitcoin, which is the most famous example of a cryptocurrency. Bitcoin and others such as Litecoin and Ripple are digital currencies that work independently of banks. Cryptocurrency trading involves using digital wallets, blockchains and complex methods of encryption.
It is possible however, to speculate on price movement of cryptocurrencies without owning them. This simplifies the process and makes it far more accessible.
Futures involves predicting whether the price of a commodity or stock will increase or decrease within a given time period.
Options are one of the more complex forms of day trading and would certainly require some form of trading education: It basically involves buying an ‘option’ to buy or sell stock during or after a period of time depending on whether you think the stock’s price will fall or rise.
Binary Options Trading
Binary options are a simplified form of options trading where you predict whether the price of a stock or commodity will go up or down over a set time period. The investment ‘stake’ is fixed, so the potential loss is capped. As the payout is also known in advance, these are often referred to ‘fixed risk’ trades. A trader will know exactly how much they will win or lose, regardless of the size of price movement on the underlying asset.
Binaries are high risk trades, and education options are limited. They are now banned in Europe due to a proliferation of fraudulent operators. Paying for education is equally high risk, and free websites or forums are a superior option, alongside demo accounts.
Trading indices involves trading on a group of stocks related to one particular area. The FTSE 100 for example is a collection of the top 100 companies quoted on the London Stock Exchange. The S&P 500 and Nasdaq are similar groups of stocks traded in the US.
It is possible to trade these index prices, and learning how to trade them revolves around price action and economic analysis for the market as a whole.
Social or copy trading involves setting up a trading account and linking it to that of another, more experienced trader. Whatever trades they make, your account also makes meaning your profits and losses are ‘copied’ relative to how much money you’ve invested.
Swing is not a form of day trading, but you will see many day trading education sites offering courses in it. Swing trading is a form share trading where you keep hold of your shares for anything from 2 days to 2 weeks in order to profit from any ‘swing’ in their price.
Free Education Vs Paid Education
If you’re researching trading education, one of the main things you’ll be considering is cost. The first thing to point out is that there’s no such thing as a free lunch; almost every platform or course that promises free trading education or tips will, at some point, want you to pay for more in-depth services.
The aim is to find a reputable, high-quality course that offers value for money. What constitutes value for money depends on your own ambitions and circumstances. Here are some things to consider:
- Know what you want: There is a huge amount of trading education opportunities out there. Before you enter your card details on the first website that offers to help you gain financial freedom, make sure you know what you’re after. Do you want to trade futures or forex? Do you want to invest a little or can you afford more? Do you learn best by reading or watching? Do you want someone to walk you through the basics or are you happy to invest in some indicators and get cracking? Knowing these things will save you a lot of wasted expense that could be better invested in successful trading.
- Do your homework: Some websites are upfront about how much they charge for a course or educational package, others require more investigation. If a course offers ‘free’ education, it’s likely that after so many lessons, you will have to start paying. These costs aren’t always advertised or made clear, so be sure to read the small print or ask in advance what, if any, costs might be requested down the line.
- Budget: Course and indicator prices can vary wildly from $20 to $9000. There are also subscriptions that can range from $10 per month to nearly $200. Spending top money is a big commitment so, if you feel a premium course is for you, make sure you can afford it and that you’ll get your money’s worth out of it.
Finding Your Level
Online trading courses often have different levels, usually Beginner, Intermediate, Pro or similar. As you’d expect the prices are on a sliding scale, with beginner courses being cheapest and advanced more expensive.
When browsing for the best trading education, assess what level of trader you realistically are. If you don’t know your FTSE from your elbow, then signing up for a premium, gold members trading room straight away isn’t going to make you a premium trader.
On the other hand, if you’ve done a little investing in stocks and want to take your trading to the next level, or maybe get involved in another kind of trading, then an intermediate course will be for you.
Advanced trading education should only be considered by those who have been full-time traders for a while and feel that they’d like some mentoring to work alongside their trading and keep their strategies fresh.
Whatever level you are, remember that education works best as an auxiliary to your trading. All the tips and books and demo accounts that money can buy are no substitute for real-world, real-time, real-money trading.
Paying For Quality
Day trading education varies enormously in the quality and type of resources on offer. Also, be wary of the trading school founders who say they started offering courses because they were sick of spending money on systems and indicators that didn’t work, an expensive course doesn’t necessarily equal a reliable course.
The kind of services or resources you might expect to find offered as part of a trading education package might include:
- Indicators: Programs that use various calculations to analyse and indicate the direction of stock prices
- Demo Accounts: These allow you to practice trading using a simulation platform and simulation money
- Webinars/Tutorials/Live Classes: Live online lessons or tutorials with experienced traders
- Mentoring: One-on-one support from an expert trader
- Downloadable materials: This might be things like PDF booklets or interactive quizzes that explain trading in greater depth
- Weekly/Daily E-mails: These might provide you with a certain traders insights or market advice for the day
- eBooks: eBooks are occasionally available free to generate interest in a more detailed, paid course
The main indication of the quality of any course or package is how credible the trader behind it is. Only consider investing your money if:
The trader behind the education has at least ten years’ experience and demonstrable success. You can only become an expert trader through direct experience; anyone without a considerable amount of that is not going to be worth your money.
The course teaches you how to trade on your own. Any genuine trading teacher or mentor will empower their students to trade for themselves. Any course or platform that requires constant payment to keep you on their site is less likely to put you in the right headspace to become a successful independent trader.
Online Educational Trading Videos
One thing we haven’t discussed in this piece is the role of YouTube trading education videos. The first thing to say about these is that, whilst there is a place for them, it’s a potential minefield. If you’re looking for free trading education on YouTube, you should apply the same standards of research you would for any trading education course.
Before you rely on a video because it has impressive graphics or a snappy title; remember to consider whether the video’s presenter has significant experience as a trader. Are they genuinely teaching you something for free or just luring you into buying something you don’t need?
Can a profession as complex as day trading be distilled into a five or ten minute YouTube tutorial?
As a guide to the absolute basics of day trading for beginners, YouTube is hard to beat. However, it’s also worth questioning how many traders worth their salt would give away worthwhile trading education completely free.