These tips and tricks will give you a leg up when working to succeed in your career as a trader
With the rise of the internet and the ease of access with which anyone who has a stable connection is able to tap into financial markets, day trading has become an extremely lucrative and viable career opportunity for disciplined and savvy traders.
With just a little bit of capital and rigid schedule, and comfortable workspace, day traders everywhere have quit the office with no intention of ever going back.
But it’s not easy to make is a day trader (why else wouldn’t everyone do it?!?) but if you stick to your plan and follow a few key tips, independence and prosperity might just be around the corner.
Let’s take a look at our top 7 tips for becoming (and staying) a successful day trader.
8. Cut Out the Emotions
If you’re happy and you know it… bring yourself back down.
The emotional key to trading is neutrality. When you come to the trading table, imagine you’re doing so like a robot, free from human emotions.
This means that whenever you bring sadness, happiness, anger, joy, frustration, whatever, to your trading day, it will have a impact that is outside the realm of your trading plan and strategy.
If you’re happy, you might over trade due to an excess of confidence. If you’re sad, you might sit out trades that should have been made according to your plan. Whatever the emotion is, learn to control it and reduce to a neutral state in order to think clearly and make level headed moves in the market.
7. Set your Trading Hours
When you’re left to your own devices, it can be a monumental struggle to discipline and schedule yourself into a strict daily routine.
This is why one of the first things you should do as an independent day trader is to set your trading hours.
Just because you can trade at 3am, doesn’t mean you should (unless of course that hour is part of your trading plan).
When you set business hours, you give yourself a schedule devoted to your craft, as well as time that can be spent doing out of trading activities. It’s important that you have personal time for family, friends, hobbies, so that you don’t burn yourself out with trading 24/7.
6. Accept that Winning outside of your Trading Plan is actually Losing
What’s at the core of every great trader’s arsenal? An airtight trading plan.
For example, you see the market trending upwards and you get a feeling deep down that there’s a can’t miss trade just sitting there, waiting for you to make.
But it’s not in your trading plan.
Screw it, you make the trade anyway. This time it might work out for you but the more and more trades you make based on your gut and not your plan, the closer you come to inevitably losing, and losing big.
In this sense, as an inverse to the tip, losing while following your trading plan is actually winning.
5. Pinch Pennies when it comes to Operating Fees
Anything that might potentially eat into your profit needs to be looked at through an ultra strong magnifying glass.
While we’re not advocating using cheap services, just be sure to not spend more than you need in order to function reliably and successfully.
Keep the fees and costs low so you’ll have more money to inject into the market.
4. Accept that Risk Management is the Most Important thing to Keep your Eye On
Great entries and great exits are critical to succeeding in the market but it’s what we do in between these two events that will make or break us as traders.
This means you need to have a great risk management strategy built into your trading plan. It also means that if price is approaching your stop level, you follow the rules you set up for yourself and get out.
3. It’s not all about the Benjamins
When you only focus on making money, it’s easy to let greed take over and lead you to poor decisions.
Yes, we’re trading to make enough money in order for it to be a career, but when you just focus on the cash, you’ll end up with tunnel vision that often misses the big picture.
Price will move regardless of what you know or what you do. This is why it’s imperative to focus on and execute your trading plan, not the allure and potential of a windfall.
2. Own Up to Everything
Take full responsibility for everything that happens to you in the market.
Price breaks against your wishes? Tough, it happens. Something else doesn’t go your way? Get used to it, the market does whatever it wants.
There are no other factors to point to and blame if things don’t work the way you wanted or expected them to work. The only thing you can do is go back, review, and possibly tweak your trading strategy in order to limit the damage in the future.
Everything that you do in the market is all on you. Accepting this is the only way you’ll be able to change and evolve as you advance in your trading career.
1. It’s all in the Trading Plan
This final tip is really a summation of the previous tips combined.
In your trading plan, have defined entries, exits, and risk management strategies and follow your rule book to a T.
A good trading plan will be like your bible, a guiding light through calm times and a life jacket in stormy markets.
Photo by Marvin Ronsdorf