Irrespective of what you may have been made to believe about day trading – that it can be a pretty easy and lucrative way to make a living or build wealth from the convenience of your home, with just a personal computer with web access etc – its more than that. People have begun to realize that though whatever is said may be true to a great extent nothing is ever so simple. Day trading may be lucrative but not easy. It can be done from the comfort of one’s home round the clock but on the other hand it requires a certain skill set, and a lot of focus and dedication. Money can buy you web access and computer but what about willingness to learn? Can you buy that? And is so easy to acquire? I am not going to waste screen space on answering that question because you know the answer already.
Trading has become visible, viable, profitable and probably accessible option for people more than ever before. The previous generation of traders has never had this kind of run earlier. They can’t imagine getting such an easy access to information once only reserved for rooms.
Another fall out of this is that online brokers have grown like mushrooms and promoted the democratization of scholarship. It takes only a few dollars now to get an entry into Forex market. This drop in pricing has had two major impacts: 1) it helped to popularize the markets by making them affordable for more and secondly it has promoted the development of speculative short-term techniques, including day trading or swing trading. And many aspiring and serious minded traders have benefited a great deal from it.
How to Make a Living with Day Trading
I wish to share a handful of practical tips and advice on how to make a living with day trading with new traders through this post.
1. Keep your day job for now – Some aspiring traders make the mistake of quitting their regular 9-5 day jobs to make a living as full time traders at once. Just because you have stumbled upon this idea that looks easy from the outside is a lot tougher once things are on the roll. With no stable income to run your life, can jeopardize you and it is difficult to take the right decision under pressure.
The fact of the matter is that if you quit your regular employment, your chances to make trading your long term profession get reduced. So retain your work whilst you play with the idea and understand it thoroughly and test the water gradually while building on it your way up.
2. Take yourself through a learning curve by studying a few certifiedtrading strategies – There are several thousands of certified and verified day trading strategies out there that you can shortlist a few from to implement today. With that said, do remember that majority of them are exaggerated and are hung like carrots before the greedy traders to ruin them of their past savings and paralyze the entire future. This is why it is necessary that you take your learning really seriously as it could be the major determinant as to whether you will make a living as a successful trader or not.
3. Learn to identify the strategy that will work – The more you read about day trading, the more chances you stand to learn more and discover a successful strategy to get started. Some individuals get it right within the first few trials while others have to test, test, and test before they see any success. If you are fortunate to get your hands on a winner, stick with it until you master it entirely and can see the cash coming in. As soon as you have mastered it, it’s time to look for another a single. You ought to be able to see now that the more profitable strategies you can get your hands and mind on, the more likely you are to make a living with day trading. I hope I am making sense to the readers while I write this.
As a trader who wants to succeed long term, you should bear in mind that trading strategies are governed by rules which cannot be deviated from. Emotional bias thus gets eliminated because the systems operate within the parameters known by the trader. The parameters are based on historical analysis and real world market studies so that the trader can have confidence in the strategy and its operating traits. A trader should go through the trading advisory before starting to trade from his real account and with real money.
When a trader is developing a trading strategy, he should consider things like return, risk, volatility, time frame, style, correlation with the markets, methods, and so on. After developing a strategy, it can be verified using computer programs. Since the strategy has worked in the past in real market conditions, the chances are that if it is not over-optimized, data-mined, or based on random coincidences, it might have a good chance of working in the future.
A trading strategy can be executed by a trader manually or automated with the help of computer. Manual trading requires a great deal of skill and discipline. It is tempting for the trader to deviate from the strategy, which usually reduces its performance, whereas an automated trading strategy covers trading formulas into automated order and execution systems with the help of advanced computer and electronic access to world market information.
The trader should also learn about various styles of trading like Technical & Fundamental analysis, Quantitative trading, Trend following, Volatility and also time frames like intraday, day trading, swing trading and Long term trading.
By keeping these practical advices in mind, a trader can sure work as a successful long term trader.
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