Inside the $1 billion cottage industry cashing in on the retail-trading phenomenon

International Day Trading Academy, a trading school that offers courses and an eight-day trading retreat in Bali, says interest in the retreat has exploded three or fourfold in the past year, according to Kelly Lowry, the general manager.

Andrew Menaker, a psychologist and a trading coach who frequently works with retail traders, says he's also noticed a big push among the retail crowd to get in the right mindset for trading.

The number of people who have inquired about Menaker's coaching services has about doubled in the past year, he said, adding that the waitlist to nab an appointment with him can range from several weeks to several months.

Menaker says some of his clients, who are willing to do just about anything to gain an edge, have said they spent upward of $10,000 on materials like indicators, charting packages, and online courses. Others have said they've spent money on things like cold plunges, heart biofeedback devices, brain wave devices, and even psychedelics.

Menaker is skeptical of some of the businesses selling to day traders. The space has become flooded with hype and influencer marketing, he says, especially targeting new traders who are just learning the ropes.

“It's really a buyer-beware environment,” he said.

Making money day trading is hard.

One 2020 study found that 97% of traders who persisted for more than 300 days ended up losing money, after accounting for fees. Just 1% were able to make a profit, and it was often minuscule.

Still, many are willing to keep trying.

Cameron Buchanan, the cofounder of International Day Trading Academy, told Business Insider he believes the heightened volatility is what's behind the boom in traders seeking these kinds of services.

Big swings in the market are often ripe with opportunity to win (and lose) big, but navigating the intraday moves is not easy even for professional traders.

More people are also lured by the prospect of becoming full-time traders, a once-niche ambition that now offers the possibility of financial freedom and the ability to work from anywhere with an internet connection.

“People are sharing that life's stressful,” Lowry said of some of the academy's clients. “People come out of retreats and say, ‘I've made a decision that I'm going to do this now.'”

Dr. Reid Daitzman, a Connecticut-based psychologist who frequently works with day traders, says he's seen a 50% increase in traders wanting to work with him over the past year. He believes that a good chunk of his clients are deeply involved in the stock market and seek to improve their trading, partly because they've already lost a large sum of money, but also because many are bored.

“A lot of people just trade because they have too much time on their hands, literally, and they have nothing to do,” he said, adding that some of his clients were recovering from substance addictions and picked up day trading in sobriety.

Menaker, who consulted with traders on Wall Street prior to opening his own practice, believes the main way traders improve is by understanding themselves better. His work hinges on the idea that traders need to know their “inner market” — a nexus of hopes, dreams, fears, and memories that explain how traders respond to risk and opportunity.

While he sees some value in trading education and some evidence-based tools, like HRV biofeedback, he believes most gadgets out there won't make a difference unless traders do the work to understand their own minds.

“People will never really get what they need, which is, ‘How do I respond when I'm under pressure and how can I change that to act more in my own best interest?' That's really what the courses should be emphasizing more, in my opinion,” he said.

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