Day trading can appear simple at first, but don’t let that fool you into thinking that it is simple. The information you receive on the internet and on late-night infomercials might suggest otherwise. You are led to believe that all you need to do is to watch a few videos or complete an online course, and boom, you’ll automatically become an expert trader.
You shouldn’t fall for it.
Prior to starting out in any profession, it is essential to obtain a good education. There is no doubt that making money is the goal, but many beginners believe that all of the information they need will be available in an eBook, probably gratis. A little amount of free information cannot make you more money than people who have studied for decades?
Many are under the impression they don’t need to learn anything. It is believed that they can purchase a “magic system” or a “software” that will place their trades for them and make them rich despite their lack of knowledge. Then they follow the recommendations of some “guru”, blindly following his advice without understanding any of the market’s dynamics.
I appreciate the fact that you differ from everyone else.
Your motivation for reading this article on this blog is that you want to succeed at day trading. No worries, I will give my best to teaching you exactly how to do that.
But before that, Although reading this article doesn’t guarantee you’ll succeed, it does help you get started on your journey to financial freedom. You’ll learn much about day trading throughout this article, but you need to adapt what you’re about to learn to your current knowledge if you want to make the most of it and become an established trader.
What are the benefits of Daytrading?
You might have quite a strong reason for wanting to start day trading. Money is frequently the motivating factor. Ideally, you would like to be wealthy. Hold on, there’s more. The inference from this is that you want to become wealthy.
Daytrading is what I consider to be the most effective method of becoming wealthy. The following top 7 reasons explain why:
1: Minimum capital requirement
Getting started doesn’t require much money. The process isn’t like buying a house where you’re expected to pay a monthly mortgage and other expenses that drain your cash flow. It’s possible to get started investing with less than $1,000.
2: There is no discrimination in trading
You don’t have to be a certain race. There is no difference between your skin color and mine. No matter what your education, whether you graduated from college or not, you’ll make it. You don’t have to care about your gender. It doesn’t matter where you come from. No matter how old you are, it’s not important.
It doesn’t matter what you’ve done in the past. The trading market still provides opportunities for you even if you have been imprisoned for years. Neither your language nor where you are from matters. There is no point in worrying about how you look. Having sufficient funds to trade should not be affected by your social status.
3: Inventory and office space are not required
Renting or buying office space is not necessary, nor are you required to keep inventory, so you are free of worries regarding expiration dates, damaged products, shipping, handling, insurance, or displays and promotion of your products.
4: There is no need to recruit employees
No need to hire any staff, so no need to manage payroll, appraisals, leaves of absence, or performance evaluations. A broker is the only member of your team.
5: The start-up cost is not too high
Only six things are necessary for a successful Daytrading
a: Your PC
b: You need Internet access
c: A charting program
d: A Broker
e: The trading account must be adequately funded
f: A trading strategy that works
6: You’ll almost immediately get your money back
Traders have quick access to cash because they can quickly liquidate their assets. It takes a matter of seconds to convert trade into cash. You can make money fast and comfortably nowhere else in the world but here? Buying again and selling again can be performed within minutes. Profits are visible right away.
7: Cheap transaction costs
You can trade for less than $10 per transaction. As compared to real estate transactions, in which anyone who sells their home must pay closing costs and a commission of 3-6%, the closing costs are considerably lower.
Despite my endless ramblings, you’ll likely see what I mean. You can achieve success in trading by reading this article. I would like to emphasize the following points:
- What is Day trading
- Who is considered a day trader?
- How to day trade for a living
- What you need to get started with Day trading
- How much does it cost to start trading?
- Which market is best for trading?
- The best strategy to develop to become a successful day trader
- What you can do to make sure that your day trading strategy is Effective
What Is Day Trading?
Day trading can be defined as the act of buying and selling financial instruments repeatedly throughout the day. There is the possibility of both gains and losses as the day progresses, as prices rise and fall in value. By trading strategically, you can make quick profits in brief periods of time when market trends and fluctuations are at play.
Day trading, however, is designed to produce smaller earnings consistently; it is not intended to produce huge wealth through one single transaction. Day trading is a viable and lucrative trading strategy, but not a get-rich-quick scheme. No one can guarantee success and immeasurable wealth through day trading.
The key to success in day trading, as in any other endeavor, is to have a strategy. However, by utilizing the appropriate tools and understanding how to use them efficiently and successfully, you may dramatically decrease the dangers associated with day trading. Perseverance and devotion are required for a successful trading profession.
Who is considered a day trader?
The day trading lifestyle isn’t for everyone. It does have many benefits, but it also has its drawbacks. Among them is the fact that setbacks are almost inevitable. Trading involves losses. They cannot be avoided. Traders who cannot accept that reality should abstain from trading.
Plan your approach:
No matter whether the day trader is doing it for a living or just as an extra source of income, successful day traders generally have the discipline to follow through with their trading plan and solid trading strategies. In the realm of day trading, there is the fierce rivalry. Success is dependent on focusing on a set of techniques that can be implemented instantly and without hesitation. The secret to outperforming the market is to devise a tried-and-true trading strategy.
Unfortunately, even if you use a tried-and-true trading technique, you are not assured trading success. Something more is required. perhaps, discipline.
A lucrative plan is worthless if it is not accompanied by discipline. Successful day traders must have the discipline to strictly adhere to their method since they understand that only deals recommended by the system have the best possibility of yielding a profit. No matter how skilled or inexperienced you are in trading, it is quite simple to put your whole trust in graphs, charts, and software. Trading would be a lot easier if it were that simple!
It is difficult to guarantee trading success merely by purchasing trading templates and trading programs.
Too many enthusiast traders have attempted this strategy, but the results have been dismal. Their progress was hampered by a lack of information as well as the instruments they purchased. Trading education, like all things, will have a long-term influence on traders, whether they are new or experienced.
Day traders use software tools and indicators, and this statement is not intended to dismiss this use. Indicators help traders achieve success through technical analysis. A few examples include MACDs, moving averages, and stochastics. In spite of following their signals carefully, effective day traders realize that nothing is 100% reliable. It will take more than one trade to make you wealthy.
Successful traders understand that chasing the home run on just one transaction will only lead to disappointment and despair. The importance of consistency cannot be overstated. The key to effective day trading is creating a plan that delivers consistent profits and modifying your approach as your expertise with day trading develops and evolves.
It is only through dedication to obtaining the necessary information and diligence to stick to their investment plan that trading can be effective.
It’s important to adopt these two major mentalities:
1: Dedicate yourself
Becoming a successful trader takes time. You will need to invest time, effort, and dedication. A vast number of people believe that they know everything and that they will make money using a “magic system” which will arrange their trades for them. Neither of us is confident that this will succeed.
2: Maintain an attitude of positivity
Trading is difficult for the faint of heart, but it can also be straightforward. You will suffer losses along the way, but you must get up every day believing in yourself, your plan, and your ability to win. You’ve undoubtedly heard of the Law of Attraction before, right? In a nutshell, we are informed that in order to succeed, we must focus and concentrate on that accomplishment. Similarly, if you look for the bad, you’ll most likely end yourself in a loss-focused mentality. It is critical to have a good mindset and behavior.
The thrill and lucrative nature of day trading cannot be denied. A correct understanding of the risk factor can dramatically reduce your risk, increasing your trading success rate. An individual who is incapable of researching new trading tactics, reading about new and improved trading strategy updates, and working tirelessly in a high-pressure trading environment might not be cut out for day trading.
Depending on your desire, discipline, and focus, you can leverage day trading to help achieve financial success.
How to day trade for a living
Are Day Traders Really Capable of Making a Living with Day trading? A lot of people ask this question repeatedly. The short answer is, YES, it is possible to make a living Day trading.
To trade successfully, you should not increase the bar too quickly. Set it to a level that you can control every time. You may always boost it once you’ve proved that you can reach your objective on a continuous basis.
Here are some examples:
If you are new to trading, you may wish to set an objective of $200 per contract for the first four weeks. Even though it may seem like an obvious concept, the majority of traders lose money on the markets. “Increasing the bar” begins when you consistently earn $200 per contract. Take $300 per week into account for each contract. Make sure that you keep raising the bar while still being satisfied with your progress.
Day traders can leverage their account sizes and trade multiple contracts on a relatively small balance when they trade futures, options, or forex. There are many brokers who offer to allow you to trade one contract of almost any futures contract available on the market, so if you want to engage in futures trading, you can easily find one of them.
Having a solid trading strategy that generates consistent profits is necessary for becoming a successful trader. The possibility of making money day trading ten contracts or 1,000 shares should be feasible if you can make money day trading one contract or 100 shares.
What you need to get started with Day trading
Many first-time traders are eager to get started in trading. The vast majority of those traders fail, with only a tiny proportion succeeding; good trading requires skill, expertise, and experience. Prior to diving in, you must define your goals.
Is your trading activity aimed at achieving any particular goals? Why are you interested in trading? Take the time to carefully consider your investing goals before you invest a cent. With an understanding of what your objectives are, you can stay motivated throughout a difficult trading period and develop better-investing strategies.
When people first start day trading, they often fantasize about getting wealthy overnight.
While not impossible (it is conceivable), please keep in mind that it is also exceedingly unusual. It is considerably safer to develop a trading plan that will allow your account to grow at a slower rate over time, allowing you to spend your gains for retirement.
Develop a plan
Whatever you do, define what you want to achieve first, then figure out how to get there. It’s better to know where you start than to end up on the wrong rung.Put the plan into action
Having devised an action plan, it is time to actually execute it. Most people fail in that area as well.
You May Also Want To Read: Taking Your Algorithmic Trading Business To The Next Level
How much does it cost to start trading?
How you reply to that question will be determined by the market you are attempting to trade. We’ll use a methodical technique to determine the ideal market for you; nevertheless, the following information will give you an idea of your options:
- It is necessary to have a trading account with a minimum balance of $25,000 – $30,000 in order to day trade stocks.
- Day trading futures requires you to have a trading account of $5,000 – $10,000.
- It is recommended that you have between $1,000 and $5,000 in your trading account before you start trading options.
- When it comes to trading forex, a beginner can start with $500 – $1,000 in their trading account.
Avoid making the typical error of allowing your present financial position to influence the markets you decide to trade. Traders who are starting out often believe they should trade their entire savings. It is important to determine your risk tolerance and your financial goals prior to choosing how much money to trade.
What Do I Need To Start Trading
To Start Trading, you Will Need the Following;
1: A ComPuter
No need to buy the most expensive computer, nor do you need the latest and greatest. You don’t need the most recent computer, nor do you need the most costly one.
Basically, any computer purchased in the last two years will suffice. Most charting software and trading platforms run on Windows, so if you’re thinking about getting a MAC, be sure the program you’re interested in is compatible with the MAC system.
As a guideline, the following are the minimal requirements:
- IBM or IBM compatible Pentium IV-class computer
- 1GHz or higher
- The Windows 2000 and XP operating systems
- RAM: 256 MB (use 1GB of RAM when running Windows XP)
- Hard disk space of at least 3GB
2: Internet access
This is not a place for the economy.
You should never trade using the modem or dial-up connection on your phone. Your trading performance is reliant on a stable Internet connection. All trading choices are dependent on the information you receive from the market, therefore any delays are unacceptable.
3: A Charting Software
Using charting software has become a crucial tool for both beginners and professionals of online day trading. It used to be customary to doodle charts in your notebook using news articles in the morning.
Today, a variety of tools are available to monitor the market in real-time. Information can be displayed in a variety of ways, all of which are likely to be beneficial to your trading. To know how to choose the best Charting Program for you, please read this.
4: A Broker
Whether or not you actually need a broker may be a question you have. Yes, you do. A broker is necessary when you plan on day trading. Unless you are a member of the exchange, you cannot place orders without a broker no matter whether you are trading stocks, futures, forex, or options.
It is critical to grasp the distinction between a broker and a market analyst. An analyst focuses on the stock or futures market for the purpose of predicting what it will do or will not do, as well as how individual stocks or commodities will perform. Rather than studying the markets, a broker’s job is to execute orders to buy or sell.
Commissions from sales are the most common source of income for brokers. Brokers earn a specific percentage of any transaction they are involved in. A flat transaction fee is charged by many brokers.
Two types of brokers exist, full-service brokers and discount brokers.
Full-service brokers often provide a wide range of assets as well as financial advice. They are typically compensated on a commission basis.
In most cases, discount brokers offer no service other than carrying out the work you ask them to, without giving you any advice or research.
In order to ensure that you are making wise investments, you may need to work with a full-service broker if you are new to investing. Their skills will help you to overcome the challenges you face at this point. You only really need a discount broker to trade for you if you already understand the market you want to trade.
Novice traders can have a difficult time choosing a broker from the many options available to them. The number of online brokers has risen over the past few years and more are emerging all the time.
If you use the following guidelines you will increase your chances of finding a trustworthy and honest forex trading broker:
- You should check that the forex trading broker is registered with the local regulatory agencies. If the broker is U.S.-based, check if they are registered as Futures Commission Merchants (FCM) with the Commodity Futures Trading Commission (CFTC), as well as with the National Futures Association (NFA).
- Referrals from someone you can speak with are always preferred.
- Analyze account details, including minimum deposit requirements, leverage, spreads, etc. Inquire specifically about commission charges, lot costs, etc. You should do this in order to avoid incurring hidden costs. You will receive the impression that some brokers are the cheapest, but little do they know that hidden charges are very damaging.
- User-friendly trading platforms are essential. Most traders, especially those who are new to trading, find trading software challenging.
5: Trading Strategies
Even with multiple screens, fast internet, and well-funded trading accounts, without a strategy, you won’t be able to generate good profits.
