How to be a Day Trader
Just as you would participate in training by professionals who know what they are doing in order for you to fly a plane or sky dive, training is essential in an effort to make a career while day trading. While your safety may not be affected by day trading without training, your bank account is certainly in the face of destruction without proper training.
Are you going to trade stocks, futures or forex? Have you ever traded your preferred market before or are you beginning at ground zero? What stop loss should you run with? How much are you willing to lose, per trade? Of the total amount of your original trading capital – what is the maximum amount you are willing to lose prior to your decision to stop trading and salvage the remaining capital in your trading account? What is your daily profit goal? What is the max you are willing to lose on any given trading day? What amount of trading capital do you have available? Is your trading capital account discretionary income that if lost, you can live without it?
Do you have the right equipment to day trade? What condition is your computer system in? How many monitors do you intend to use? Are you utilizing the fastest Internet speed available in your area? While dial-up is still available, if that is what you have, pull the plug on that right now and move up to higher Internet speeds – DSL, cable, satellite, T1 etc or, forget about trading, period. To even think about trying to day trade with dial-up is plain out, stupid – it is not going to happen people and it ‘will not’ work!
Do you have a scale prepared to determine how many shares you can trade based on price, volatility and loss risk tolerance for any market you plan to trade in? Do you have a scale prepared for a stop loss depending upon risk of the market you are trading? A highly volatile stock for example would require a wider stop which in turn would require trading fewer numbers of shares.
Additionally, you should have various trading plans laid out that change with the overall market conditions. You would not use the same trading strategy in a slow, low volume trading session as you would a highly volatile and heavy trading volume trading session. Until you have these trading strategies laid out, have tested them in demo-mode and found them to be successful trading strategies for you, your personal training to day trade is far from over.
You must be prepared to take losses because it’s the way the trading game works. Controlling those losses takes a great deal of skill and discipline. Your financial success at day trading will be determined by how well you handle losses as well as, those gains, no matter how large or small. Emotions must be intact and controlled at all times for every action you take while day trading.
Consider participating in professional day trader training. People pay for training everyday for new ventures they wish to delve into. Take the first step to protecting your trading capital by seeking help from professionals.