Do you want to know how to day trade? …
Have you been searching for the SECRET to day trading all over the internet and stayed up all night rummaging through websites and Youtube Videos after long hours at work?…
I know. I have been there.
I used to wake up every morning at 4 am on the east coast to catch the market. Then, study 1 to 2 hours when the market is open before work. Later, I’d check the market on my phone while at work when I had a small break, and once home, I’d study until late then off to bed to wake up and do it all over again.
But, it was all worth it as today I make a liveable income by Day Trading the Stock Market and I want you too as well.
Therefore, In this blog, I’ll be giving you a 3 Step Guide that will cover everything you need to know about where to start your day trading journey.
Surely you have heard the premise “only 1% of traders are successful”, it is a phrase that even your postman says.
Though it is statistical data, It is very true. Do not get discouraged as one of the BIGGEST reasons why 99% of traders fail like all those who fail to reach financial success is simply because they have the wrong data.
Without the RIGHT education, you won’t get very far as a trader.
I remember following all these “gurus” to later learn from my mentor that for a whole year I have been on the wrong path.
What’s the right path?
Step #1 The RIGHT Path
Maybe you know, maybe you don’t.
Psychology is the MOST IMPORTANT part of learning how to trade. And NO, I’m talking about trader psychology in relation to emotional discipline that all these media outlets and gurus ramble about.
In fact, that’s not trader psychology!
Trader psychology is “behavioral finance” which is the study of people’s psychological reactions (decisions) to economic and/or trading situations. This is the unspoken truth and path to becoming a successful trader.
Basically how people react to technical and fundamental indicators; the decisions these indicators influence them to make. These decisions drive markets.
Studies show that psychology causes 90% of market movements. The other 10% being computers.
Just so you know, this is how the term “Price action” trading began as action being the market’s (people) actions taken based on these indicators and “Price” being the movement.
So, it is very important to start your education there. Read and study trader’s strategies not to learn them, but to learn how to spot them and understand how it influences them. This information can be used to make a watchlist and trading plan. I talk a lot more about making a watchlist and trading plan here. Click to Watch
Step #2 DON’T invent a Strategy. Copy one
As I’ve mentioned before, don’t learn a strategy. But, you should also never invent one.
Why would you waste your time inventing a new cake recipe when you could just pick up one at the grocery store for under $10 bucks and start baking cakes. Get it?
Vanilla please!! 🙂
A strategy is only as good as the number of people who are using it and can identify its signals.
For example, in a breakout strategy, if you are the only one that sees the breakout, and you are only buying 100 shares, how far do you think the stock will go?
Not very far indeed.
Stocks need volume which is a collection of multiple traders identifying and reacting to a signal which in return sends the price in the direction of the combined decision made.
Copy a strategy and understand the mindset of the traders that uses it; the influences and the decisions made based on those influences.
This can be very complicated, especially if you are a beginner.
However, successful traders are successful (redundancy worth it) because they understand the strategy’s roots.
Do you want to be a successful trader?
I wanted it so bad that I even read books on human psychology and grabbed any content I could find just to understand more trader’s mindsets.
“Learn from everyone even failures and they teach us what not to do”
But, Never forget… You MUST test these strategies with demo accounts.
Do not risk your money with a strategy that you do not fully understand!
Step #3 Practice Makes the Master
Well, I already learned a strategy and its mindset … “Can I open a real account and make money?”
Nope! And Nope!
ONLY when you have become consistent for several months in your demo account, can you then consider opening your live account with real capital.
But, thanks to demo accounts you can…
- Experiment with volatile markets and trends
- Use different time frames.
- Test indicators
- Try different strategies
- Practice without losing real money
- Use different position sizes
- Become demo rich lol; my favorite.
To conclude, becoming and being a profitable trader is a business, a lifestyle, and a journey. You MUST learn to adapt over time.
You will invest many hours, a lot of practice (some tears) like myself when I blew up my account. Quite a few times in fact. I still remember crying over my $20K+ loss on $SNAP (Snapchat)
But, pay the price today so you can pay any price in the future.
Trade safe and all the best!