If you haven’t checked out our “How to Start Trading” or “Building your Trading Station,” feel free to click the links that’s provided.
So, you’ve decided to become a day trader! Congrats on going through with this journey, where you will learn many invaluable skills. But you’re probably wondering when you’ll be making six figures. We need you to get out of that mindset first and think baby steps. After all, Rome was not built in one day! Several people claim that they’ve made $20,000 to $40,000 a week and sometimes even in a day! While that is possible, it is also uncommon. There is no simple formula in becoming a successful day trader. Everyone acts and thinks differently based on their emotions.
In this post, we will break down some of the essential elements that make you a successful profitable day trader.
Set Realistic Goals
First off, you have to be real with yourself and set a realistic goal. It is nice to have ambitious goals, but you have to think logically as well especially when it comes to your financials. Not everyone will have the same goal either. Some people’s goal might be to just simply learn how to trade and others make 6 figure salaries so they could live a more comfortable life. Your goal, depending what it is, also determines the time period of getting there. The less you care about making huge profits, the less risk you’d be taking when you trade and vice versa.
We recommend that you increase your desired profit goals gradually and slowly reach each goal. By doing this, you can become a profitable trader quicker.
As mentioned in previous posts, you have to find a trading style that fits your personality and schedule.
If your schedule is packed, then you are most likely a swing trader. Swing trading positions can usually last two to six days, but it may last a little longer as well. With swing trading, you are trying to identify the overall trend and then seize the gains within that trend. Technical analysis is usually used to help these traders take advantage of the trend and improve their trades. Swing traders don’t need to observe the market all day long.
However, if you have more time on your hands, you can be day trading. You would be spending more than 2 hours each day (or less if you want!) to watch trade setups and short-term price movements. By the end of the day, the day trader exits all of his or hers trading position and do not have to worry about any news that could impact the market overnight. With day trading, you are looking for a quicker compounding of returns. Volatility works in a day trader’s favor granted you are on the right side of the trend.
There are many types of strategies when it comes to trading, but that is the beauty of it. You get to mix up different strategies and mold it to your liking.
Chatrooms can be another way to becoming a profitable trader. The trading community can provide a lot of help to you as well. If you were curious on how other people think, you can just ask them through the chatroom. If you need help figuring out how much internet speed you need, the chatroom is right there for you. There is a lot of knowledge floating around when you enter the room. If you have not yet found a chatroom, then click here.
Knowledge is Key!
Traders who have studied economics and finance might have an easier time grasping the idea of how the markets and profitability work. But that isn’t the only way to becoming a profitable trader. This is not meant for any discouragement, but just informing you that people have different learning curves!
Practice, Practice, and Practice!
In order to become a profitable trader, you must constantly keep practicing. Just look at the all-time greats. Michael Jordan was cut from his high school basketball team the first year he tried out and now he is one of the best basketball players in HISTORY! He became so successful because he practiced all the skills a basketball player needs. So just like in trading, you need to practice all the skills a trader would need and that takes time and effort. You will need time to refine your trading strategy, so that you can apply it to your live experience in the markets. Education is important, but just like every game and sport, you have to be thrown into the ring to learn from experience.
Ultimately, becoming a profitable trader is all on you and how much you’re willing to put in the work. Don’t let losses discourage you from trading because those losses are there for you to learn and become a better trader. Take note of your mistakes and make sure you don’t make them again! If you are disciplined and revise your trading to constantly improve on your mistakes, you will become a profitable trader in a shorter time!