How to Start Day Trading in Profitable Way
Trading with profit or day trading for a living should be considered a career. Like other careers create a way of living, with day trading there is a way of life which has methods and techniques that must be learned and fixed.
One of the benefits of day trading is the ease of entry into the business. There are no degrees or initial investments required. Although you do need the initial capital to start, that can even be a minimal amount.
However, as with every career, you need to know what you are doing and have some education. Don’t cheat yourself and your possible success with not educating yourself as much as is possible.
Take Your Time to Learn System
Take your time to learn your System. Learn tools and technique of your trade. Learn to understand your chart program inside and out. Try to understand the different markets, the exchanges and trading sessions all around the world.
You don’t have to know everything and every little information to get started, but you should know and have your strategy and system. You should understand how to connect to data feeds and manage live charts.
Take your time to learn what you need to know and build your confidence level. Do you want to trade for the next 12 days, or be able and around to trade for next 12 months or longer? The longest way to a destination often is a shortcut. Don’t take shortcuts. Take advantage of free education available and use your demo account for simulated trading.
No matter what instrument and market you decide to trade and the strategy, it is much more cost effective to learn in the demo and simulated trading, than live with real losses. Build your knowledge, and confidence in the demo while training you into habit through practice and repetition. Once you’re profitable and can show a consistent record, then go live.
Have a long-term goal. Why did you get into trading? Do you want to quit the job eventually, spend more time with the family, for extra income, maybe income in the retirement? Know what your goal is and keep a focus on it.
As with any Endeavour, keeping the focus on your goal and the reason for the goal will help to maintain the motivation and inspiration through the challenging times.
Good Risk Management Plan
Have a good risk management plan. Consider if you started with an account of $1000 and the goal of increasing the account by 5% a day. Then, once you reach the 5% day, or $50, you stop taking anymore live trades.
Continue trading in the demo practice but don’t take any more in live trades. If you saw the numbers on a spreadsheet, you would see in the 20 – 22 trading days a month you will double the account size. Then the next month you continue to trade until the profit reaches 5% of account which is now $2000.
If you continued to do for 12 months, you could grow your account to 1 million dollars. Now, of course, you’re not going to profit every day. There are going to be losses. Again, with the losses, once you reach 5% of account size you stop for the day. This is the example of one risk management plan that can work.