Ross Cameron has become one of the most well known day traders in the business. Famous for turning a $583.15 trading account into $10 million in around five years, he’s frequently asked how he reached this atypical, and highly unusual, achievement. In his new book — How to Day Trade: The Plain Truth — he explains that how he did it doesn’t matter as much as how you can do it yourself.
In his book, Cameron takes an honest approach to explaining day-trading. He doesn’t sell and he doesn’t try to claim that his way is the only way. Instead, he tries to help people understand if day-trading really is for them.
To do this, he lays out trading, warts and all.
Ross Cameron: Why You Should — and Shouldn’t — Trade
Chapter 3 is called “Day Trading is a Scam!” and runs through the various ways day-trading can be a swindle or a gamble if you approach it incorrectly. By the third chapter, Cameron’s already painted for his readers a realistic picture of what it takes to be a professional day trader and why it might not be for them.
“To be successful at day-trading, what you need much more than a Master of Business Administration degree is a Master of Human Behavior degree,” Cameron writes. “Here is why day-trading is not for most people. You need to pay the hard and soft costs of admission. When I say ‘hard cost’ I mean that you’ll need to fund your account with a certain amount of money. Other hard costs include the purchase of your computer and any external monitors, and the cost of any courses, chatrooms, news services, and software tools you may use. [But] the ‘soft costs’ are far more expensive. These involve the significant time you will invest in learning how to day-trade. Sure, nothing is stopping you from day-trading on the first hour that your brokerage account is open, and with no prior training. That is a recipe for disaster in this business. Depending on how reckless you are, it could cost you far more than the money you funded your account with.”
How To Be Successful in the Real-Life School of Day-Trading, According to Ross Cameron
Cameron says people first need to learn a lot of concepts.
“That takes work but is straightforward. [But] then you need to understand how to manage your risk. This involves a set of principles that you’ll apply in different situations,” he writes. “Next — if you’re smart — you will not risk a dime, but will see how good you are in a simulator before trading in a real money account. Maybe you’ll be amazing at first, or awful: The market will quickly let you know.”
Ross Cameron advises using a simulator to figure out what you’re doing wrong, fix it, and try more simulator action.
“Only when you’re consistently doing at least OK should you even think about using real money,” writes Cameron. “No matter how good you were in the simulator, you’ll discover that trading with real money is different, so they’ll be an adjustment phase. And these steps are only the beginning.”
Ross Cameron’s book provides a clear understanding of the steps traders need to take to start trading — learning the concepts, understanding the risks, buying the gear, training, and then setting up. But the tome also goes into useful detail regarding the mindset and psychological challenges of being a day trader.
“When you’re just starting out in day-trading, even a well-meaning comment from a loved one can mess with your head. When you announce to the world that you are a day trader, you create expectations for yourself and for others to measure you by. You’ll have plenty of time down the road to tell others what you do, if you stick with it,” Cameron writes, advising beginner traders to tell as few people as possible that they’ve embarked on their new career. “Keep your circle small, preferably consisting of people who can be supportive as you’re learning.”
Focus More on the Risk You Need To Manage, Instead of the Return You’d Like To Have
“The beauty of day-trading is that there are several steps you can take to affirmatively reduce your risk,” Cameron explains. “And by first reducing your risk, you can begin the process of developing strategy and discipline in a safe environment.”
Yet Cameron’s book isn’t not all about the downside for prospective day traders. For each challenge, he offers a solution.
“I’ll paint a realistic picture of what day-trading is and is not, from someone who’s not afraid to show you the good, the bad, and the ugly,” he shares. “As best I can in book form, I’ll give you a sense of what it’s like to sit at a computer and trade stocks like a pro, but also how it will work when you’re a beginner. (Spoiler alert: The main action happens between your ears.) You will get a clear sense of whether this profession is a good fit with your personality or not.”
When dealing with losses, Ross Cameron writes that they shouldn’t be considered mistakes and advises starting out small.
“Trading in a $500 account is like driving your first car,” he writes. “You’ll make beginner mistakes, but the damage is minimal in a small account. Spend all the time you need in that safe environment where the stakes are low. Once you’ve proven consistency, confidence will follow. That’s when it’s time to scale up to a larger account.”
As well as the importance of mindfulness and an understanding of the psychology of trading, Ross Cameron addresses in expert detail but clear language, the technical aspects of trading. He has a whole chapter on reading market charts and another on finding the right stocks to trade.
While Ross Cameron’s new book does its best to dissuade the wrong people from trading, it also gives the right people an immense tool kit to get started.
“If you have dreamed of becoming a day trader, this book is dedicated to you,” he writes. “You and I are so much alike. We share the same dream and I hope we have the same drive. I’m just a little farther down the path than you. I’m here to support you, and I hope this book is a way of sending the ladder back down to help you.”
How to Day Trade: The Plain Truth by Ross Cameron is available through online retailers and at warriortrading.com for $9.95 (electronic), $18.95 (paperback) and $24.95 (hardcover).
The information provided in this article, including in the book How to Day Trade: The Plain Truth, is for educational and informational purposes only and should not be construed as financial advice. Day-trading involves a significant risk of loss and is not suitable for all investors. Readers should consider their financial situation, objectives, and risk tolerance before engaging in day-trading. Past performance is not indicative of future results. It is recommended to consult with a qualified financial advisor before making any investment decisions.
Markus lives in San Francisco, California and is the video game and audio expert on Good e-Reader! He has a huge interest in new e-readers and tablets, and gaming.
