Daily Financial Stories
Contact Us
heide@investmentals.com

Don’t quit your job just yet

You shouldn’t quit your day job to start day trad­ing. It’s a risky propo­si­tion, and it’s best to start small and grow over time. If you do decide to quit, make sure you have enough mon­ey saved to cov­er at least six months of expenses.

 

Be prepared to lose money.

You need to be pre­pared to lose mon­ey when you start day trad­ing. It’s inevitable that you will have los­ing trades, and you need to be okay with that. If you can’t han­dle los­ing mon­ey, then day trad­ing is not for you.

 

Practice meditation

You need to prac­tice med­i­ta­tion in order to man­age your emo­tions. Emo­tions play a big role in day trad­ing. If you are in con­trol of your own emo­tions from the very begin­ning, your odds of suc­cess as a trad­er are high.

 

The best traders know what they are doing, and why.

90%
Losers

10%
Brokers and Winners

First and fore­most, you need to under­stand that more than 90 per­cent of day traders fail. The vast major­i­ty of peo­ple who attempt day trad­ing end up los­ing mon­ey and quit­ting. If you don’t have the dis­ci­pline to take loss­es quick­ly and move on, or the cap­i­tal to absorb mul­ti­ple loss­es, then day trad­ing is not for you.

Peo­ple lose because they blind­ly fol­low the herd — There is a dif­fer­ence between being part of the herd and being a sheep. When you are part of the herd, you are fol­low­ing the lead of oth­ers who are more expe­ri­enced than you. When you are a sheep, you are blind­ly fol­low­ing what every­one else is doing with­out any thought or understanding.

A firm under­stand­ing of the stock mar­ket and how it works is a must. You need to know what stocks are, how they’re trad­ed, and the dif­fer­ent types of orders you can place. Most impor­tant­ly, you need to know how to read a stock chart. If you can’t read a stock chart, you’re not going to be a suc­cess­ful day trader.

Some win­ners are those who fol­low trad­ing sig­nals

Other Types of Traders

Scalpers
Posi­tion Traders
Swing Traders

Scalping is a type of day trad­ing that involves tak­ing quick, small prof­its on a reg­u­lar basis. Scalpers typ­i­cal­ly hold their secu­ri­ties for only a few min­utes or even sec­onds. The goal of scalp­ing is to make small, con­sis­tent prof­its. While scalpers can make a decent amount of mon­ey, they also face a high­er risk of los­ing money.

Day trad­ing gives you greater con­trol over your trades. As you are hold­ing your posi­tions for a short peri­od of time, you can make deci­sions quick­ly and react to mar­ket changes imme­di­ate­ly. If you don’t like the direc­tion a trade is going, you can get out quick­ly and lim­it your loss­es. Fur­ther­more, you have the poten­tial to make a greater prof­it on your win­ning trades as you are able to cap­i­tal­ize on short-term mar­ket move­ments. Unlike oth­er types of trad­ing, you are not hand­cuffed to your positions.

Posi­tion trad­ing is a style of trad­ing that involves hold­ing onto a secu­ri­ty for a long peri­od of time. Traders who posi­tion trade may hold a secu­ri­ty for months or even years. The goal of posi­tion trad­ing is to prof­it from the over­all move­ment of the mar­ket, rather than from the day-to-day price swings. While posi­tion trad­ing can be a prof­itable way to trade, it also comes with a cer­tain amount of risks. 

Day trad­ing gives you greater con­trol over your trades. As you are hold­ing your posi­tions for a short peri­od of time, you can make deci­sions quick­ly and react to mar­ket changes imme­di­ate­ly. If you don’t like the direc­tion a trade is going, you can get out quick­ly and lim­it your loss­es. Fur­ther­more, you have the poten­tial to make a greater prof­it on your win­ning trades as you are able to cap­i­tal­ize on short-term mar­ket move­ments. Unlike oth­er types of trad­ing, you are not hand­cuffed to your positions.

 Swing trad­ing is anoth­er pop­u­lar trad­ing style. Unlike day trad­ing, swing trad­ing can involve hold­ing on to secu­ri­ties for more than one day. Traders who swing trade may hold onto their secu­ri­ties for days, weeks, or even months. The goal of swing trad­ing is to prof­it from the price swings that occur over a longer peri­od of time. Like day trad­ing, swing trad­ing also comes with its own set of risks.

Day trad­ing gives you greater con­trol over your trades. As you are hold­ing your posi­tions for a short peri­od of time, you can make deci­sions quick­ly and react to mar­ket changes imme­di­ate­ly. If you don’t like the direc­tion a trade is going, you can get out quick­ly and lim­it your loss­es. Fur­ther­more, you have the poten­tial to make a greater prof­it on your win­ning trades as you are able to cap­i­tal­ize on short-term mar­ket move­ments. Unlike oth­er types of trad­ing, you are not hand­cuffed to your positions.

Now that you know what day trad­ing is (buy­ing and sell­ing secu­ri­ties with­in the same day), the fol­low­ing steps will out­line a process to start day trading.

1. Choose an online bro­ker — In order to start trad­ing, you will need to open an account with an online bro­ker. When select­ing a bro­ker, be sure to com­pare fees, account min­i­mums, and the types of secu­ri­ties they allow you to trade.

2. Learn the basics — Before you start trad­ing with real mon­ey, it is impor­tant to learn the basics of day trad­ing. This includes under­stand­ing dif­fer­ent order types, read­ing charts, and know­ing how to man­age risk.

3. Devel­op a strat­e­gy — Once you have a good under­stand­ing of the basics, you can begin to devel­op a trad­ing strat­e­gy. This should include when you will enter and exit trades, what types of secu­ri­ties you will trade, and how you will man­age your risk.

4. Paper trade — Once you have devel­oped a trad­ing strat­e­gy, it is impor­tant to test it out before using real mon­ey. This can be done by paper trad­ing, which is essen­tial­ly sim­u­lat­ing trades with fake money.

5. Start small — When you are ready to start trad­ing with real mon­ey, it is impor­tant to start small. This means only invest­ing a small amount of mon­ey in each trade. As you become more com­fort­able with trad­ing, you can start to increase the amount of mon­ey you invest.

6. Keep a jour­nal — A jour­nal is a great way to track your progress as a trad­er. Every day, you should write down the trades you made, why you made them, and how they per­formed. This will help you to learn from your mis­takes and also track your progress over time.

7. Review your jour­nal — At the end of each week, month, or year, review your jour­nal to see how you are doing. This will help you to iden­ti­fy any areas where you need to improve.

Fol­low­ing these steps will help you to get start­ed with day trad­ing. Remem­ber, it is impor­tant to start small and to keep a jour­nal of your trades. Review­ing your jour­nal will help you to improve your trad­ing over time, and grow your trad­ing skills, along with your money.

Close
Search

Hit enter to search or ESC to close