How do you become a winning stock day trader? And what is stock day trading anyway?
Day trading is the ability to buy stocks, currencies or futures, and then sell them on the same day. Out of the transaction, a skilled day trader expects to earn a reasonable profit. Notice that the word skilled is important. Stock day trading is not for the uninformed, lazy or unskilled trader.
While many traders experience more losses than gains in day trading, there are skilled stock day traders who swear by the system and continue to reap the benefits. Here are some advantages of day trading and how to become a stock day trader.
One major advantage of day trading is being able to work on your own as you please. You are your own boss. You don’t have to consult with others before making a trading decision. Should you fail, you are the one accountable for your trading losses.
Since there is no one to check up on your trading decisions you must have the self discipline and hardworking attitude to know your trading business well. You must be able to put your emotions on hold as you make your trading decisions yet be confident in those decisions and not be afraid to trade.
Because more people want to become involved in day trading there are now quite a few sources of information that you can find online compared to many other kinds of online businesses. You must be diligent in reading these materials, as they can help you as you learn more about day trading. However, be cautious of some of the information that you find on the Internet. Some website offers are mere enticements to get you to part with your money. Once you subscribe to their services or purchase their software that’s it. You may not get any useful value in return. Make sure that you deal with a reputable company.
You do not need to know all that much about stock trading before you can try stock day trading. Anyone with a high speed Internet connection and a little risk capital can venture into day trading. However, if you expect to trade at a profit and to be successful, you need to study how trading systems work, find one that is suited to you, and work hard at mastering the system. Most people who try out day trading without careful preparation and without a good day trading software program will lose money.
In day trading you don’t want to speculate or make decisions based on your opinion of trends or your gut feelings. You should master a trading system and base your decisions upon the systems trading signals. If you use a proven system you should also be able to gain using the same system over and over again. That is if you have the discipline to follow it. The main reason so many day traders end up losing money is that they fail to follow their own trading system even when it is a very good one.
One of the major advantages of day trading is that there are some very good off the shelve software trading systems that will generate accurate trading signals. You must take the time to research various software offerings and be willing to pay for a trading system that suits your trading style.
The matter of being disciplined with your trading comes up again. Discipline, discipline, discipline, there is just no way to get around it. To be a profitable day trader you have to possess the iron clad kind.
These are only some of the advantages of day trading. The disadvantage, of course, is the always present risk of losing money. As with any business venture, this risk is always present. That is why it is important that you understand the day trading business well before getting involved with real money trades. That way, perhaps starting with a demo trading account, you can develop your strategy and skill level and minimize your risk in the process.
You should start out by trading small until you can see how your trading system is working. Day trading is a very scalable enterprise. Once your system is working well you can easily step up the size of your trades. Just don’t over do it and trade all out with only a small amount of capital to back up your trades.
The most important thing to realize if you want to become day trader is that you do not want to always be in the market. Most day traders over trade. They do not wait until a trade sets up just right. They lack the discipline to be patient and to wait for the proper signals before pulling the trigger.
Some day traders wait too long before entering a trade. That is they wait, and wait, and wait some more for the perfect trade. Since there will always be an element of risk with any trade the waiting trader will often be too late in entering a trade. As a result they will probably lose or make only a small profit on the trade.
To become a successful day trader is not easy. But it is amazingly profitable for those traders who master the art. A really good day trader can make hundreds of dollars, even thousands of dollars, almost every trading day. That is the reason so many people want to give day trading a go ready or not.
Believe me, it is best to learn what you are doing and to be well prepared before trading with real money. The cost of experience can be high for the unprepared.
