When you start out as a day trader, the world is a hectic place. There is a nearly insurmountable amount of terminology to ingest and not much time. There are thousands of stocks out there, that must be pick through in order to find the best ones, the companies most ripe for a run that day, with profits made possible.
If you are smart you are immersed in online day trading classes, that will help you make sense of all the terms, stock charts and price changes. Many people, itching for a chance to ditch their day job and make a fortune on the stock market, see day trading as a get-rich-quick scheme. A way to start betting on companies they like early in the morning and watching their earnings grow by the hour. Those newbies get eaten for lunch. It is a known trope that 90% of day traders losing money. That is where the fish congregate, ready to be scooped up by the sharks.
The way to avoid starting out as a lowly fish is to wade into the ocean slowly, acquiring gills and fins by educating yourself about the techniques that will result in profitable trades. Because, you know, there are strategies and techniques that can be applied to the market that can make a difference in shark-filled waters.
The key steps are mastering the trading strategies, find the home run stocks, maximize the winners you do find and learn how to read charts in real time that will allow you to put it all together. And, then, after you take those classes covering the aforementioned subjects, you still need to put in practical time, testing out everything that you took in.
For instance, you will want to spend time in a daily trading chat room, even after learning the ins and outs of day trading strategies. You may have the book learning down at that point, but what you really want is a functional understanding. A mastery of the technique so you can use it to find the right stocks at the right time.
Spending time in a slightly informal chat room with other day traders allows you to understand how the veteran traders employ their strategies and how they pick stocks. Learning from the masters is a great way to emulate the masters.
And once you get exposed to actual traders, you will undoubtedly be exposed to “fish stories,” or tales told about crazy profits and nest eggs built in less time than it takes to gut a bathroom or redo a kitchen. The crazy thing is this: Some of these tales are true
One veteran trader, with years of experience under his belt, undertook a challenge that would make others blanch. He funded a trading account with $583 and, in just 44 trading days, built that up to $100,000. And there are verified broker statements. So it is possible to to make a bunch of money, really fast, in day trading. You just need years and years of experience under your belt to do it.
But, one of the most efficient ways you can get better at day trading without risking any money is by spending time in a simulated trading environment. These paper trading simulators give you a set amount of money, say $100,000, and then let you trade and pick stocks in an environment that looks, feels and runs just like the regular market. It allows you to test out momentum trading strategies and other techniques without losing any real money. It is where you can learn some real risk management. Risk management is essential to making money as a day trader. You can make quick, 5-10% profitable wins throughout the week, but then lose it all on Friday morning, by sticking to a losing trade and chasing a comeback that will never happen.
What you learn in the trading simulator is that all trades need a stop-loss. That means that there is a loss point where you are going to get out of the trade no matter what. There is no stick around after that, because you have eaten a predetermined amount of crow. And you live to trade another day.
The bottom line is that you need to really put in the time to get good as a day trader. But it will be worth it. You need you find the right strategies and techniques to be profitable as a day trader. And once you do, you will be able to throw off the yoke of the cubicle day job, once and for all.