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I am tempted to buy Humbled Trader "premarket daily trading plan and discussion" subscription of Humbled Trader.

Question: How profitable is it likely to be, based on the following facts?

  1. Her group has over 500 subscribers and no negative comments on her YouTube videos. (I wonder if some user would loose money, they would at least post their experience in anger)

  2. Her videos are very popular.

  3. She claims average 5 days of loss day-trading each month (and others are profitable).

Experienced Traders: Is there anything incorrect in the way I am thinking?

I have done 5-10 trades (in 5k range) total.

https://www.humbledtrader.com/ https://www.youtube.com/channel/UCcIvNGMBSQWwo1v3n-ZRBCw

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  • 36
    "average 5 days of loss day-trading each month (and others are profitable)" — it doesn't matter how many days show a profit, and how many show a loss. It matters how much the profits and losses are. Mar 10 at 14:53
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    A truly successful trader wouldn't need to try to make money by selling services/classes.
    – 7529
    Mar 10 at 18:47
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    Also very interesting by Ben Felix on the topic: youtube.com/watch?v=qhHOmZVAqBE
    – Manziel
    Mar 10 at 22:40
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    No. If this trading system actually reliably made money, then this trader would already be a billionaire and definitely would not be telling people their secret methods.
    – Kaz
    Mar 11 at 20:47
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    Note that it's quite easy to make things that look like they reliably make money for a while, by effectively being a reverse lottery where 999 times in a thousand you make a little bit of profit, and 1 time in a thousand you lose a massive amount of money.
    – Kaz
    Mar 11 at 20:47
64

Short answer:

The YouTube channel has over 500k subscribers but most videos have well under 50k views, complete with click-baity thumbnails. Those numbers mean nobody actually cares. Internet personalities like these make their money by selling newsletters and "classes," which supplement the ad revenue from their YouTube channel. If she were actually a miraculous investor, she wouldn't be running a mediocre YouTube channel, and she surely wouldn't be giving away her secret sauce for a nominal fee.

Long answer:

Day trading is one of the fastest ways to lose money. In fact, the vast majority of actively managed funds underperform the market. And those are run by "professionals" who do it as their full time job. Mere retail traders are differentiated from the denizens of Reddit's Wall Street Bets only by their lack of self awareness.

Rather than asking experienced traders if you're missing anything, you should ask successful traders if you're missing anything. The former may have spent plenty of time trading, but statistically are all but guaranteed to be much less wealthy than the latter, who instead buy broad market index funds (ETFs or mutual funds) at regular intervals regardless of market dynamics.

A number of studies found that women are more successful than men when it comes to stock trading. Do women know something men don't? Probably, but the data show their success is largely because because they trade less frequently.

I'd recommend reading Efficiently Inefficient, which is a serious book on how hedge funds work. It's about how "smart money" invests. It will give you a sense of just how pitifully unqualified retail traders are. Not really because most don't have PhDs in math, but because they don't have access to massive data sets, citadels of computing power, and a thundering herd of engineers keeping everything running.

For a lighter read, you can check out Flash Boys, which explains how high frequency traders manage to use ultra fast communication networks to execute your orders before you can. Likewise, Daniel Kahneman found that the performance of "top" investment managers at big name firms was wholly indistinguishable from chance. He didn't make himself popular when he explained that to said managers.

If you want to get a real education on finance on YouTube, I'd recommend starting with Robert Shiller's Yale course on Financial Markets.

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  • "Flash Boys" is a good read. I've seen some criticism of it but if you are a Robinhood user, I would suggest checking it out. Their user's trades are Robinhood's product. The book is about the kinds of companies that are Robinhood's customers.
    – JimmyJames
    Mar 10 at 16:57
  • I think there was an experiment with a chimp randomly selecting several stocks and then comparing the results to several fund managers carefully selecting an equal number of stocks. I remember the chimp doing better than average. Mar 10 at 17:34
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    The link basically said that female investors are better than male traders. Yeah, investors generally do better than active traders, regardless of gender. Also, there is a difference between retail traders and Wall Street Bets readers in terms of self awareness?
    – 7529
    Mar 10 at 18:45
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    @7529 WSB people know they're being extremely foolish. Many retail traders do not. Mar 10 at 18:48
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    @JimmyJames You are not going to be front-run by HFT bots by using robin hood (or any other discount brokerage, they all do the same thing). Not only is that illegal, it wouldn't make sense at the volumes involved. See kalzumeus.com/2019/6/26/how-brokerages-make-money or chrisstucchio.com/blog/2012/hft_apology.html for a detailed description of how this little corner of the market works.
    – Philip
    Mar 10 at 20:41
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Few people can outperform the market over the long term. Most of them cannot do it consistently. Therefore there is little reason to buy some premium plan
For the average Joe (without excessive risk) money is not gained by excess activity. This will just eat away your money by commissions and bid/ask spreads.

On your questions:

  • negative comments can be deleted
  • popularity means nothing
  • the recent decade has been characterized by a bull market. This means that in general markets go up. Anyone can make a surplus in this situation by being lucky. What most people forget is that having a surplus is not enough. You need to perform better than a benchmark index. And this is really hard

If you want to be educated about investing, there is plenty of neutral resources out there. I personally can only recommend The Plain Bagel channel which explains more or less everything you ever wanted to know about investing. And they do not sell you any plans

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First, nobody can actually answer your question as asked. Nobody can possibly tell you if you will make money with someone else's system.

Second, profitable trading comes down to having a statistically-proven edge in the market, and executing on that edge. The second part of this is easy to overlook, so let me elaborate.

If I had a system that produced winning trades 90% of the time, and when it lost the average loss was 5x the average win, this would be a profitable system. But now what if I told you that it is specifically designed to work in the futures market where you are employing massive amounts of leverage, and that for every $500 you had in your account you were actually trading with $200,000 of borrowed capital (you're using "margin")? Would you have the psychology needed to trade that without screwing up the system even once?

Odds are you would not, and you would crash and burn with the system. Nobody can sell a "guaranteed profitable system" because you the human customer still have to be the one to trade it, and you will mess it up.

As to the comments that "a successful trader doesn't need to and would not reveal their methods", this is absurd logic. In fact the opposite is true - a truly successful trader knows full well that most people will not be capable of doing what they do, but want to spend money on "the dream" and so are more than happy to share what they do, how they do it, etc. as a source of additional income without a care in the world, because they know 99% of their customers will screw it up.

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