Are you looking at making money trading online? Read 10 Great Reasons why you should day trade. Practice makes perfect. Here are important tips that will make day trading your career and a successful investor.
In this article, I am going to share my very personal experience about trading Forex and Binary Options – essentially day trading. I will give you 10 great reasons why you should trade. However, I will only start by telling you that in 2016 I made more than $250,000 from day trading, without ever risking more than $2,000 of my personal capital. And I am not a professional trader. I understand trading, but I am essentially a blogger about finance. Now if I could manage this kind of income by dedicating a few hours a day to trading, can you imagine what your potential will be if you focus and engage yourself in making day trading your future?
Here is my experience shared in practical terms. Any new trader hoping to make a future trading will be able to understand my reasons. Every one of the reasons why you should day trade must be taken seriously. There is no question of the advantages of trading. However, success in day trading can only be achieved by following the rules!
My Ten Best Reasons Why You Should Day Trade
When I started day-trading, I always woke up with massive enthusiasm. It felt like Christmas every day! What would I get by the end of the day! As with most of my Christmas gifts, I did not read the instructions properly and was many times dismayed at the end of the day. If I had bothered to follow my 10 best reasons why you should day trade properly, I would have saved myself a lot of unnecessary anguish!
Therefore, if you are a new trader, read on carefully. This article is intended to hand you a key to a successful financial future. But you need to read the full instructions!
Here is Why I Recommend Day Trading – Only for Smart People!
#1 I like to Live on the Fast Lane
Right, I guess I put my foot in it from the very first reason! Yes, you do need to be smart to day trade, and you do need to have a penchant to live in the fast lane. Day trading is super-fast! I have tried all types of day-trading. Starting with Binary Options dead easy but nerve wrecking, and not necessarily fair. To scalping and swing trading. Without a doubt, day-trading is not for the feint hearted. It requires focus, concentration, and special skills.
Let me try to explain this in layman’s terms. Do you enjoy playing Scrabble or Chess? Or any mind game for that matter? If your answer is yes, my next test is that you should put a timer on your game. How difficult will your game get with a timer? The moment you introduce a timer to your game, the goal-posts change. The pressure of time takes the game to a new dimension.
Day-trading is the same. On a board game, you need to see what is available on your rack or on your board and make a decision on impulse. With day trading you need to analyze the market, make a trading plan and make a decision. Sometimes this is as long as split seconds.
This is not to mean that you just hit a “buy” or “sell” position. It requires skill building. You learn how to place “harmless” trades whilst being “on the run”. But do remember, if you are on a level of procrastination, day-trading is Not For You!
Trading against a Timer is a Reality in Day-Trading
#2 Day Trading is Like “Tango” You Need to be in Tune with the Market
Here is another reason why you should day-trade. If you love dancing and understand how it feels to be in tune with a good partner – then you should try day-trading. The market is vibrant. It is alive. The market has a unique way of behaving, however, it does have a set of rules and some basic consistent behavior. The market does follow “steps” or a set of rules.
Therefore, in this case, there are a few important rules of follow
- Understand the basic rules of trading and the market
- Practice trading – ideally on a demo account if you are new to trading. Practice makes perfect and this is not a standard cliché.
- Use your Intuition. Unless you are practiced you cannot under flexibility! Imagine you walk your first marathon without training. Day-trading is pretty much the same thing. Warm up those muscles, train hard, and release the day-trader in you!
#3 Money Management and I am not Joking
Guys, I have not made it to the top of anything I have ever tried without doing excellent money management. Even the dare-devils like Richard Branson who has “cojohones” bigger than a bulls’ is only successful without money management.
It is all well and good when you are trading Demo. However, nothing quite prepares you for the rush, the fear and the exhilaration of real hard cash! There is no simulator that will ever give you the same feeling! This is the best shot for any adrenalin junkie. It also helps you cope with, other serious situations in life. What are your immediate instincts if there is a fire in your apartment block? Your survival instincts will get the best fine tuning. It is a coping device that will help you for the rest of your life!
Real money is serious. It is not easy to make. Therefore, you need to take it seriously. Although I always recommend that you trade demo until you get your training, there arrives a time when you need to “feel the groove”. When you are ready for that, you will need to read about “money management” over and over – and over and over.
The discipline to managing your money are imperative in this business. You need to learn when to “go for it” and when “to call it day”. Finally, you need to cash in your profits faster than acknowledge your losses.
Do you have what it really takes to be a day trader?
#4 How To Cope with Losing Trades – Why You Should Day-Trade
As with everything in life, trading will bring the sunny days, and it will also have the rainy ones. As long as you can keep the rainy days restricted to winter and protect yourself with an umbrella, you should be fine. There is nothing better than having winning days. However, if you losing days are going to dampen your morale so bad that you cannot cope to shake hands with tomorrow, then you should not be trading.
There will be the inevitable losing trades and the negative balance days. It is only practice that will allow you to overcome the temporary setbacks. Unless you enter this game with the maxim “you win some, you lose some” then forget about day-trading now.
I find that when I look at my balance as my “working capital” it helps me put everything in perspective. This is true for any business. Let us say you are in the retail business. You need your “working capital” to buy stock which in turn you will sell at a profit. What if for some reason, the market temporarily made your stock redundant, or not desirable, no longer trendy. What are your risks? I would say, more or less equally risky as day-trading! The market may change, demands can change, and your stock could be in demand again. But until then, you will have a “losing day”. This is true of any business. It is true even if you are employed. One day you are the flavor or the month, the next your competition will eclipse your moment of glory.
Trading is like any other business or job. It carries risks and it can be rewarding. It is a question of whether you really want to day-trade with the financial and time independence it can give you, or not.
#5 Practice Makes Perfect – Are you Disciplined enough to have a good reason why you should day-trade?
Let’s face it, have you ever been on a plane where the pilot told you that this was his first flight? I have been, and I was gripping my seat all the way from Rome to Paris. And this knowing fully well, that the pilot had passed all his 10,000 hours of flying practice and simulators.
What do you think makes you so special that you do not need to have your 10,000 hours of practice? How do you head to the top without experience, study, trial, failure in order to have the eventual success?
The great thing about why you should be day-trading is that your 10,000 hours of practice will run with exhilaration. You have no-one to hold you down when you should be doing your practice hours. Therefore, if you are serious about day-trading, get down to the simulator, the demo account and start practicing.
#6 Regular Small Profits Compound to Great Gains
So what type of trader will you be? If you are considering day-trading, you are not in the trade for massive daily gains. However, few people understand the power of compound interest or compound gains.
Day traders are in for short-term trades. They are prepared for fake-outs and false breakouts. Day-traders take profits when they come. And they do that fast. Here is another good reason why you should trade. If you are looking at your charts, and you see a $50 gain in under five minutes, you grab it! You cash it in! If you stand around hoping to gain another $100, you may very well lose the bird in your hand for the hundred in the tree. Therefore, recognising what type of trader you are is very important when deciding if you want to be a day trade or a long term trader.
There is no question that long-term traders can make as much money if not more than day-traders, however, they are just a different breed. All you need to know is to identify what type of trader you really are.
#7 Chanel Style Icon – Revered for Being Individual
We are groomed through life with education. That is not to say that we are not individuals. As adults, we become stylists of our own lives. Do you remember how often you told your parents, I can make my own decisions now! I am an adult. As an adult, you are responsible for the style you chose to live life. But the bottom line is that you are responsible for your own decisions.
Life will give you experience. What does not kill you will make you stronger. All this can be applied to your trading strategy. There is so much that you can learn. Strategies are absolutely important to learn. You can have Trading Tools in your “trading tool box” and use “Expert traders” to help you.
But the bottom line remains, that you will develop your own trading style once you have enough practice. You will no longer live with other people’s rules. You will make your own. Sure, use advice from other traders, but remember that what applies to them is suited for their trading style. This may be far and divergent from your personal best trading strategy. So just believe in yourself and push through!
Develop your own trading style! No one can tell you how to do it better!
#8 Trade an Active Market
The first reason we discussed why you should day trade is “living in the fast lane”. If you like to cruise, then day-trading is certainly not your lifestyle. In order to live on the fast track, you need a good track – a Ferrari or McLaren Track! You need an active market.
Therefore, do not make the mistake of trying to trade in a sluggish market. Early morning and late afternoons are when the big boys on Wall Street or any other major market, are thinking of taking it nice and slow. You do not want to be caught up in the whiskey infused momentum of everyone else enjoying their time out. Friday afternoons – deadpan zone. Go out and enjoy the spoils of your week. Definitely not the time to make enough for dinner with your better half!
#9 The Past is For Dinosaurs – The Future is Your Oyster
If you have followed this article well and cover your 10,000 hours of practice, then you should know that analyzing what happened yesterday is not going to restore your bank balance. Looking back at old charts is fine when you are studying strategies in your 10,000 practice. By now you are a professional day-trader. So go ahead and prove it to yourself.
How do you prove to yourself that you are a day-trader? If you are a day trader you are reactional not a historian! Set yourself a weekly target. The more weeks you can manage to hit your (realistic) target, the closer you are at presenting yourself the award of being a “Professional Day Trader”. Professional day traders are traders who earn a reasonable, even good living, by day-trading and nothing else.
As such if you need yet another good reason why you should day trade, it is simply because you set your own achievable targets. This also means that you do not need to compare your results to anyone else’s. If you are happy with your goals and target results, you are already a professional day-trader.
#10 What is Your Target Revenue – What is enough to give you a good reason why you should day trade.
This is an answer that you can only answer yourself to yourself. It is a very personal and personality related question. Will you be able to make enough money day-trading to replace a full-time job? It really depends on your lifestyle and your regular expectations.
But there is one answer that I can definitely give you in this article. You can only find this out by trying it out. Naturally, all will depend on how much effort, time and capital you are prepared to dedicate to trading. But the very bottom line is that you will never know unless you try.
Personally, I find day-trading to be rewarding. I am in control of my income and my time. Financial freedom is not just about making money, but also about having the time to enjoy what I can afford with the money I make day-trading!
I hope that you found this article real and useful. If you are even remotely interested in trading then I recommend that you head over to our “Sheriff University” and get some free basics of trading principles. If you are more serious about trading, then just splurge on the most valuable €65 you will have ever spent and get “The Secret Trader”. One last bit of advice – get the best social trading simulator on the planet! Trade alongside real traders, without risking your capital.