I know how difficult it is
for most people to trade relying on the big picture. They are impatient to wait
for opportunities and want to have quick profits trading financial markets. On
the one hand, it is possible to make a decent living by day trading securities.
On the other hand, it is much easier to trade large market trends and do other
businesses. Since a lot of people want to make money fast there are a lot of
internet scams connected with that and various materials written on the subject
that have one single purpose – make money from you. So, be careful and do not
be deceived. There is no easy way of making money day trading. However, we can
do the job which is very difficult and still make money. Let us look at some of
the things that are necessary for successful day trading.
What does a day trader need
to be profitable?
Become a popular investor at eToro
Disclaimer: All trading involves risk. Only risk capital you’re prepared to lose. Past performance is not an indication of future results. This content is for educational purposes only and is not investment advice.
Become a popular investor at eToro
Disclaimer: All trading involves risk. Only risk capital you’re prepared to lose. Past performance is not an indication of future results. This content is for educational purposes only and is not investment advice.
Firstly, it is a deep understanding of the market.
You cannot just read one
article on the subject, open an account and start making money within a week.
That is a scam! You might be successful in the beginning, but difficult
situations will come and you will lose all your deposit. I know what I am
talking about, because this happened to me and I saw it happening to hundreds
of newbie day traders. Some say that knowing a lot about a market will only
confuse you. Do not worry about that. With time you will be able to select what
is essential and what is not and take advantage of that knowledge.
Secondly, you will need to have a good trading system
or even a few of those.
You should understand what
you are doing, when you are entering the market and exiting it. You should wait
for specific set ups before you get in. Don’t even try to rely on your
feelings. You will fail! Even an average strategy is better than trying to make
fast spontaneous decisions by relying on what you see happening in front of
your eyes. Be proactive, not reactive!
Thirdly, do not overtrade.
Overtrading is a ‘disease’
of most newbie traders. They are searching for opportunities every hour. And
they find them! And they lose money on those, because you cannot catch all the
moves in the market. Wait for what you know really works. This may mean that
you will make only one or two trades per day, but do not worry about that. Your
account balance will definitely be better at the end of the month.
Fourthly, be disciplined.
Stick to what you know works
and do not improvise. You do not want to make your trading a dramatic and
stressful experience. You want as little stress as possible and discipline will
help you to achieve that.
Fifthly, analyze your trades after the day is over.
See your progress. Check if
you were able to follow your plan. Try to be as objective and critical towards
yourself as possible. If you see a trend of deteriorating from your trading plan
and strategy it would be good to stop trading for a few days, re-think your
activities and go back to strict discipline.
Sixthly, invest in your financial education.
You need to improve and
possibly expand your knowledge so that you can make better day trades and fewer
mistakes. It will mean more reading books and articles from people in your
field, maybe attending some seminars or workshops. This will probably help you
to modify your strategy and make it even better.
Hope the steps were useful.
More on the topic of day
trading:
Disclaimer
Trading
financial markets carries a high level of risk, and may not be suitable for all
investors. All information on the blog http://trend0.blogspot.com/ is of educational
nature and cannot be considered as advice, recommendation or signals to trade
in any financial markets.