Day Trading for a Living - Part 3
It is common and frequent that we receive inquiries from traders and day traders who address the question as to what profit targets they should run with or how do they decide what amount of profit targets they should aim for. Many traders overshoot their profit targets or set their profit targets too high because they want to make a lot of money, fast. This is a wrong move for any trader. Stretching for the stars is always a good hot dog to hang in front of you, something to make you reach for, a goal to reach. However, when traders set their profit target too high to reach on a consistent basis the only target reached is that of frustration and loss of confidence. Why would you waste your time? Making the greed mistake once should stick with any trader and the pain of tangling with greed should never be forgotten.
Smart traders will set their profit goals low enough to reach but high enough to make you work for it. Day trading is a job. Successful day traders work for their money and so shall you.
Baby steps are a requirement for any successful day trader. Successful ‘newbie’ day traders go into day trading by setting their daily profit goals, based on making all demo trades. Remember that you should not you’re your live trading profit potential on 100 percent of your demo trading profits. A percentage of your demo trading profits must be deducted for an estimate on what you expect to make during live day trading. Foolish mistakes are made by those traders who jump into trading using real trading capital. Think about it, why would you when you have the comfort of demo trading?
Day trading has changed dramatically over the past 10 years in so many ways. Ten years ago, stocks were traded in fractions. Ten years ago there was no ‘Day Trading Rule’. Ten years ago terrorism wasn’t something you worried about. Ten years ago commissions per trade could range as high as $38.00, one way because you only got what you paid for. Seven years ago the Twin Towers stood proudly in New York. Eight years ago Americans were dealing with the hanging chad and the unknown Presidential winner.
Ten years ago successful day traders focused on dedication to individual trading strategy; no emotions while day trading no matter their gains or losses; no greed and a realistic daily profit goal. In addition, successful day traders did not try to duplicate the trades or trading methods of another day trader. For those of you who want to be a successful day trader, you need to follow the same principles as the successful day trader did ten years ago. Principles for successful day trading won’t change; just the method to get you there may need to be altered, in some way, shape or form depending upon the current trading atmosphere. Traders must learn to adjust their trading strategy to meet the current market methodologies. Like the current No Shorting Ban going on right now. No day trader uses the same trading strategy today as they did a week before the No Shorting Ban took effect.
These factors will be part of how hard you need to work to reach your daily profit goal. Unknown factors at any given time may call for you to reduce or alter your daily profit goal, for the time being. It’s time to hang tough during these difficult market times. Just remember, at any given time, feel free to switch to trading in demo mode. Demo trading is a benefit that can be utilized at any given moment. With the current volatile trading activity we all are faced with on a daily basis, day traders are shaken out of trades, more often than they would like to admit. Start small and work your way higher, one small step at a time.