The way forward to becoming a profitable trader may be longer than most believe. Many new daytraders put 2,000-5,000 into their trading account, earn intensive for a few months, lose their money and never return.
If you like a new trader would like to avoid it or if you have a little experience and have survived this first phase, here are 6 tips for how to become a better daytrader:
1. Start small
If you've followed the media, you've definitely heard of daytraders who've earned millions of dollars on a single trade, or two-million million over one year. You may also have an idea that you would like to relocate your own income with daytrading relatively quickly, and maybe start living it in 2-3 months.
Forget all this.
If you want to become profitable in daytrading and live over it over time, be prepared to make it a long process. All experience shows that if you have gone to 0 or have passed through with a little minus after half a year, you should be very satisfied. You can not expect to make money at the beginning. The first half to full year is a period when you really learn something about the markets and where you make all the mistakes that many have done before you.
2. Have a strategy and stick to it
Many inexperienced daytraders deal a little with their feelings and intuition. Despite being relatively new to the market, they can have many opinions about where the market is going. If you are to succeed as a day trader, you need a much more controlled approach that follows one or more strategies that are firmly defined.
Psychologically, it can be hard to keep strictly strict for a particular set of rules, because one of the reasons why one wants to act is often the desire for more freedom and better opportunities for unfolding. Should you survive as a daytrader, you have to go against its intuition on this point and follow some set rules. It is not a case that the word discipline goes again in all rules of thumb from skilled daytraders. If you can not keep strictly on a strategy that you have laid, it may be that you should try something other than daytrading, because it's simply too dangerous to act a little hist and here from its intuition.
3. Have good control of stops and targets
The discipline "Money management" is highlighted by most professional daytraders as one of the most important tools for achieving good results, and first of all, avoiding the big losses. Both within daytrading and stock trading it is very common for traders and investors to let their losses run too long because they hope that the situation will be reversed. Conversely, one tend to often take their profits too fast to ensure their profits.
This kind of psychology should be reversed. If you analyze statistics on daytraders results, you will see that the most successful traders do not necessarily have a very high hit rate on their strategies - often it can be around 50 per cent, or even below 50 per cent. But their losses are much less than their winners because they understand to take the loss as soon as the market goes the opposite way to what they were expecting. And when they win, they have the courage to maintain the good deal much longer than others, and ensure that their profitable trades are 2-3 times bigger than their losses.
4. Set up rules for yourself. Write them down and follow them
Many skilled traders argue that you should have an almost mechanical attitude to their trades as soon as they are in them. It makes sense - and better results - to have defined precisely how to act in certain situations. We therefore recommend writing down a number of rules that should be followed. It can be both before and after entering into a trade.
5. Educate yourself
When you start shopping, it is important that you at the same time acquire as much knowledge as possible. With so much information on the web, it can sometimes be hard to find out where to start and what it's worth spending time on. Below are some suggestions for what you can read to get a better insight into how the markets work.
6. Analyze the market on several time horizons
As a trader, it is important to be aware of the slightly larger trends in the market. Even though you are trading on a 5-minute graph, it also makes sense to know the development of a daily graph and a medium graph such as a 1-hour graph. This gives you a better sense of where the market overall is heading, and you will also get a better overview of trends in the different time horizons.
One good advice is
Not tearing away the wild dung and taking impulse decisions based on one's own intuition about where the market is going. It is a strategy that will fail with almost 100 percent security
Good spiel @tradewonk, very enlightening.
I've heard other disciplined traders state "Plan your trade, then trade your plan." in other words, stick with the original plan.
Targets/goals are prudent as well. Everyone can quote "Buy low, sell high", but the truth is that only about 10 - 15% do that; the rest just watch it collapse.
Education is all over the place now-a-days, and often for free. I use TD Ameritrade for stocks, and their accounts come with a ton of free online education, along with "Think or Swim" .
Start small is good advice. I started with about $1000, turned that into about $1800. Then SNAP snapped me and I was left with about $550. Now I am just about back to $1000. All since January 2017.
I heartedly concur with this statement "Not tearing away the wild dung and taking impulse decisions based on one's own intuition about where the market is going." There isn't really a lot of guess work to making an income in the stock market, virtually anyone can do it. It is when you try to become fabulously wealthy or believe you have the Midas touch, that's when fool hardy decisions are made. Trade with the math, not with with your intuition.
True. Trading is 80% mindset and 20% skill. Having the right mindset, which allows for positivity and growth, is what separates successful from unsuccessful. If you have an edge, and can win 60% of the time, then it's all about your money management, and learn to know let your loosing trade get out of hand.
i use poliniex and bittrex just for conversion my mining cryptos, but some time i trad like a pro.
so thanks for this tuto.
No problem, i hope you could use some of that info.
I love all of the advice you gave in this article and followed most of it before even reading the article. Definitely going to look into writing out some rules as I had sold some ETH and BTC about a month ago before buying back in and it was a HUGE mistake.
It's all about the HODL!
Great post ive been looking into this myself and i like how this is layed out :)
Thank you! I'm just doing my part to help out :)
An interesting read there @tradewomk with some good advise.
Glad that you like it. Thank you!
I enjoyed this and it intrigued me of my own personal positioning with some coins... Intrigued so that a resteem was needed. Big ups!
Checkowt & follow @jovialjoel
Thank you, i'm glad that you like it!
Nice write up, solid advice. (From someone who has traded a bit over the years)
Thank you!
Good Tips Thank you.
My pleassure!
Very good article, yet I'm not sure, and have to find out for myself, what the rules are, that I need to be consistent with.
Thank you!
I hope you will doing good. Just remember, slow is good!