So You Want To Be A Day Trader
First, you need an amount of money set to the side to maintain your current lifestyle and expenses as you go to work on your new career. This money should be able to carry you through maybe a year or more, without a steady income from a job. Secondly, you need an amount of trading capital that consists of discretionary income – money you won't fret over should you lose it all. Even though the possibility of losing it all may sound harsh my friend, it is pure reality. Day trading is a very risky business although, once tuned, can be extremely financially rewarding. The result of financially rewarding comes over time and can be quite extensive compared to the amount of money you can potentially lose.
One key to success at either tuning your ability to be a successful day trader or realizing that day trading is not something you are cut out to do should be determined without you risking one single solatary penny. Thus – you as a 'newbie' or 'wanna be' day trader MUST day trade in demo-mode only for a substantial amount of time until you conclude that you have the potential to be profitable from day trading.
You also have the option of opening a trading account with some broker who offers cheap trades, jump into the market, lose all your trading capital and scramble through the want ads for a job at maybe, a fast food restaurant. The choice is entirely up to you.
Now if you decided to avoid the want ads at all costs, it's time to get serious.
One of the first things you should do is basic research on the market you wish to trade. Do you want to trade stocks, futures or Forex? This is your decision and over time, you may decide to change your profession or even add to it. Key to day trading is that, even if you begin by trading stocks and later decide to expand to futures or Forex, you will have learned basic day trading skills. Many traders trade more than one market however; not a new trader. Master the skill of one market at a time and realize, that every day is a learning experience with financial markets. No two trading days will ever be the same.
Successful day trading is much more than just making a profitable trade. Discipline is a key factor of successful day trading. Entering, exiting, determining the amount of profit or amount of loss to take are all parts of the successful day trade. How many shares or number of contracts or lots to trade are all part of the day trading game. How do you know what that number is? Time, it takes time to learn these skills and if you are not prepared to devote the time it takes, seek another profession. Bottom line.
Oh wait, what about your day trading tools? You need capital to pay for your lifeline to the markets, do you have this readily available? Do you know what type of computer, or computer programs you will need? How about determing how many monitors you will need and, by the way what about training for day trading? Internet connection – bet you didn't even think about this and this is a make or break day trading tool. Never under any circumstance should you even remotely consider trading using dial up. Dial up is prehistoric and should be laid to rest – stay away from it. Which Direct broker that offers point n' click execution will you use? Do you even know what point n' click execution really is? What about a stop loss? Do you know what that is and what it means? Are you familiar with trailing stops? Maybe not and that should be your sign that you need training just as a wanna-a-be pilot. Can't fly a plane without training or you will crash and burn. You should survive if you lose all your money but, why bother? Why waste your time, money and a good opportunity at a new career without taking professional training?
Bottom line is that there are numerous 'key' tools required to maintain a successful day trading strategy.
This is part one of our series of 'So You Want to Be A Day Trader'. It shall remain your decision weather you follow our monthly series toward a new career in the financial markets, or not. Begin by exploring stocks, futures and forex markets to find the market that entices and interests you the most. Do not rush into this.
Consider our Training Programs. You get what you pay for and when you jump into day trading without professional training well, you'll get what you paid for which will resu;t in gaining – nothing.
Participate in a professional day trading service. Remember, the more time you spend with other professional traders, the more knowledge you can reap.
Becoming a professional day trader will not, and we repeat, will not happen over night. Time, patience, realizing mistakes and disciplining yourself to not repeat those mistakes are all part of the learning process for day trading.
Prepare yourself for a new life amongst the elite participating in the financial markets, each and every market session. The rewards can be astounding if you gage your learning curve in the right direction.
Be sure to join us again next month for, part II of, 'So You Want to Be A Day Trader'.