Approximately 90-95% of all day traders fail to become consistently profitable and the majority of them blow out their account in the first 6 months. So what can you do to become one of the few day traders that make it?
What Can You Do To Your Day Trading To Improve The Odds Of Success
In previous post we told you that the single most important piece of advice we give to day traders is to use a simulator. You might think that using a simulator cannot make you profit and that is true. But there is a key element to the use of a simulator and that is you will not lose money in the beginning which then means you can stay in the game long enough to learn to day trade. We previously wrote that most day traders blow out their account in the first 6 months and therefore never get the chance to learn enough about day trading. So by using a simulator you already have a great advantage over the other day traders.
Another important piece of advice is to get day trading education. You would be shocked about how many day traders start without any knowledge about technical indicators, chart patterns and money management. How can you expect to become profitable day trading without any prior knowledge? Does a surgeon perform brain surgery without first going through extensive training?
Equally important advice is to structure your trading. Make sure you have a plan and follow it. Do not trade like a headless chicken! The structure will provide you with a much needed focus and discipline. It is not always easy to be your own boss and all that freedom can be too much for some. They find themselves not knowing what to do and then suddenly realize their day trading career is a mess.
I feel this is very important so despite mentioned above please remember to trade on a simulator until you are profitable. This also goes for more experienced traders who are trying out new ideas and strategies. Just because you are profitable trading for example long term does not mean you are automatically going to be profitable Day Trading. Day Trading is a completely different beast than long term trading. There are many different things effecting intraday trading, such as doldrums (lunch break), opening and closing volatility and news announcements. Be smart and be safe. Slow and steady wins the race. If you are interested in a few general Day Trading advice then check out these videos.
In the next post we will talk about why you should not quit your day job before you know for sure you are a profitable day trader. Do not get greedy and think you can quit your job just because you can enter orders in your newly downloaded trading platform.