It seems every day some new and up coming superstar day trader (ok wannabe superstar day trader) asks me the same questions. It always strikes me as funny that everybody always seems to have the same questions when to me the answers just seem so obvious. I will admit I’ve been trading for a while now and I’ve seen and read all the doom and gloom numbers about how 90% of all day traders bust their accounts in the first year. Why? I mean seriously why does this keep happening over and over again? I think it boils down to a couple of really simple but important rules that too many new traders either don’t learn soon enough in order to save some of their trading capital. Or they don’t really understand the concepts. Let’s look at a couple of the major ones that you have to understand and have mastered before you can really hope to earn a living at this day trading game.
Those are thoughts I had almost every day, before I quit the safety of full time employment and decided to strike out on my own. I asked myself the same question day in and day out; surely there has to be a better way. What about the internet, I wondered, isn’t that supposed to be bringing new and exciting opportunities to all? I researched a lot of so-called work-from-home opportunities that promised untold riches, apparently mine for the taking just by sitting in front of my PC. Needless to say, in reality those schemes turned out to be about as fulfilling as, well, filling envelopes for a living. No, I knew there had to be another way – something real – something where I could be in control of my own destiny. And then one morning on the train to work, I read about a couple of Wall Street boys who had struck it rich thanks to some huge bonuses, and were now going it alone setting up their own day trading shop. That was when I discovered day trading, and I realised that this was exactly the opportunity I had been searching for. I decided there and then that I was going to make a full time living from the stock markets, whatever it took to succeed.
What do I mean? Simple. As a new trader just getting started, you will often see wild market movement. You will see sudden 5+ point upswings, or huge 8+ point drops. It happens. And some people actually know WHEN it will happen (people like myself). The temptation is there to shoot for the moon on your day trades. An inexperienced day trader might see the huge profit potential available, and set his sights way too high. They might shoot for instant returns of 30%, 40%, 50% +, calculating glorious riches right around the corner. But here is one key day trading secrets. The market is a cruel instructor. And an expensive one. You might hit lofty profit targets once, even twice. But eventually, “shooting for the moon” will likely catch up with you, and you’ll come crashing back down to reality. How’s that for a day trading secret?
On the subject of risk, day trading is almost unique in that it can be learnt and practised with absolutely no financial risk at all, by means of paper-trading – that is – trading using freely available simulation software. Thus in the same way a trainee airline pilot won’t be let loose into the skies without having learnt and rehearsed their skills in a simulator, so a new trader can employ the same technique before they start trading real money. I “sim-traded” before I gave up the day-job; it made it easy to leave the safety-net of a monthly pay check knowing from my simulated trading sessions that I could already make money in the markets.
One more time, here are your day trading secrets: You’re not Neil Armstrong. You don’t need to shoot for the moon. A 50%+ weekly return, while nice, isn’t necessary for you to be a successful day trader. Learn trading secrets to help you become the day trader that you are capable of. There are tons of resources available for you as you learn how to trade. You just need to be diligent in searching for them. You can find secrets of successful trading if you just set your mind to it.
Most asked question number 3, what’s the best system for trading? Well the best system for you is your system. Let that one sink in for a bit. There are as many systems out there as there are traders. They aren’t all perfect and what works for you might not work for me or anything else. The one thing I can tell you, there is no holy grail of systems. They all can be used by just about anyone; they just all need the personal touch of the user. A system working for a week or two or eight does not making it a winning system. All systems have their good and bad points; none of them seem to work in all markets. There is so much to choose from between systems and how to use them I think I’m going to make that a topic for an entire newsletter all by itself. The bottom line about systems is to do what works for you, learn what you like. Do you like swing trading, scalping, intra day…whatever you like there will be a system you can buy to get you started down the right path while you figure out all the nuts and bolts.
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: How The Spot Price Of Gold Is Determined By Various Factors You have full permission to reprint this article provided this box is kept unchanged.