Beware of Trading Gurus

In the last two years, millions of new options traders have flooded the stock market with billions of dollars in capital. Yet statistically speaking, only 10% of those traders will have any level of real success, and even fewer after time passes. This begs the question, why are so many people interested in trading options, and why are so few successful?

In short, people are interested in trading options because they believe that they can make money. Often, new traders are targeted by trading gurus on YouTube or Instagram. These trading gurus love talking about how easy options trading is and how they can help you to become successful, just like them. But If trading options is SO easy, why do many of their students fail at trading? 

The answer to that question is simple and can be answered with an illustration: Imagine that you have always wanted to go skydiving. At last, you are finally in a position to do so. As you meet your instructor, he tells you about the parachute and the airplane—he details the air density, rate of fall, and how your altimeter works. You’re quickly overwhelmed by the level of information provided. You don’t know anything about skydiving, and everything he says sounds like another language. 

As the conversation progresses, you eagerly ask him how many skydives he’s completed. He answers you, “oh, I’m not a professional skydiver; I just teach people how to skydive for a living.”

Academic vs. Functional Knowledge

In the illustration presented above, the instructor relies mainly on his academic knowledge to teach. Although academic knowledge can be beneficial, it often has no real-world value. This is commonly known as being book smart vs. street smart. Why is this important? 

Academic knowledge will tell you what skydiving is, while functional knowledge will get you safely on the ground. 

Stock options are incredibly complex by design. Even the language used to describe many trading terms is written differently. Some trading terms sound like they are in another language, and others actually are. Trading gurus often focus on definitions and terminology instead of teaching you how to make money. They may discuss what a trading strategy looks like but will never show you how they used that strategy in their account to make real money. The reason for this is that many gurus make their money from selling courses, ads, affiliate links, and almost everything but trading.

If you’re learning about options trading from someone who has never been successful at trading, what are the chances that you will be successful?

This is one of the many reasons why new options traders never make any money.

Whom Do You Trust? 

If given a choice, would you prefer being taught by a jump instructor who has a fear of flying or one who has made thousands of successful jumps? It’s a silly question. Even the idea of being taught by a jump instructor afraid of flying is laughable. Nobody in their right mind would knowingly put themselves in this situation, right? Right, and this is probably one of the many reasons why the chances of dying while skydiving are so incredibly small, or less than one in 100,000. 

However, as we discussed earlier, less than 10% of traders are profitable and only 6-8% of options traders last more than a few months before blowing out their account, meaning there is more than a 90% chance of failure for new options traders. 

If the jump instructor mentioned earlier informed you that you had a 90% chance of plummeting to your death, you’d probably say hell no as you made your way out the door. Yet every day, thousands of new options traders effectively say hell yes to a 90% chance of blowing out their trading account the moment they start trading. 

Considering the chances of blowing out your trading account in the first few weeks, it only makes sense that you would take advice from traders who have consistently beaten those odds, right?

Real Traders, Real Experience, Real Money

Unlike the instructor mentioned previously, trading gurus aren’t going to be so transparent. They aren’t going to tell you they make all of their money selling mentorships or products. Here at Simpler Trading, we vet all of our traders for months before they’re allowed to teach our members. Our traders take live trades daily and are transparent about their trading success.

Also, we believe in teaching functional knowledge vs. academic knowledge. Gurus will teach you what options trading is, and Simpler Trading will teach you how to use options trading to make real money.

Our goal is to shorten the learning curve to becoming successful in options trading. How do we accomplish this? It’s simple, really: we teach new traders what they need to know to make money, without all the complicated trading jargon. We take complex concepts and strategies and explain them clearly using illustrations and examples.

Our traders execute live trades with real money in real-time. They teach technical analysis in such a way that almost anyone can understand it. More importantly, our traders use their decades of experience to help you learn from their mistakes.

Free Online Trading Room

If you’re interested in learning how to trade online, consider checking out our Free Trading Room. We cover many of the fundamental aspects of options trading. When you sign up for our free trading room, you’ll be given access to the weekly schedule in the members portal. You can choose which session is right for you. Consider learning from traders who have years of success and proven track records- for free. 

We know that you will find value in this amazing service and see many of the other classes and products we offer as an organization. 

Happy trading!