5 Steps You Need to Take to Become a Day Trader

Day trading has become popular especially among stay at home people. Many people are becoming day traders because of easy access to high speed internet and powerful computers. The internet has provided lots of chances for many people especially those who are looking for stay at home money making opportunities.

This may be attributed to lack of jobs as well as stagnant salaries and wages. Despite this, becoming a day trader is a step by step process that involves learning, knowledge acquisition, intelligence, patience and other attributes.

Day traders are basically involved in the buying and selling of securities. They are able to do so by taking advantage of the market momentum. Learning how to trade is a straight forward process especially if you follow the steps below.

Save cash for training and investing

As said earlier, to become a day trader, you need to learn. This calls for attending classes either online or location based. Today, the world is digitized which means more resources and educational courses can be found online. In the past, it was difficult to find online courses, chat rooms and even social media platforms where you would meet like-minded traders and get to learn the ropes about trading.

This meant that one had to learn the hard way – training yourself. While educational resources are available online, it’s quite difficult to get free resources that are structured to help train you to become a successful day trader.

To learn about trading, it’s wise to invest in your education. Save some cash for your training and for your trading account. To ensure success, save between $2,000 to $10,000 for your education and around $5,000 for your trading account.

Are you looking for a reputable day trading training institution? Why not start with Warrior Trading. Not only will you get to learn from experienced traders but you will have access to lots of resources like chat rooms.

Learn from a successful trader

During the tech bubble, day traders made easy money buying and selling internet stocks. Many of these traders did not need prior knowledge about stock trading. All they had to do was ride the tidal wave earning lots of profits in the end. When the tech bubble deflated and the easy money dried up, majority of the traders left to look for other jobs. Why? They suddenly learned that day trading is not a game of chance but one that needs education and skills to be successful.

Although the world is currently in the digital era, it’s quite easy to meet unscrupulous individuals who will claim to be “professional traders” yet they are not. They will dupe you into joining their “free” class with a promise of free eBooks or something else. To become a professional day trader, you have to learn from a successful trader who has a track record of making money day trading.

For beginners, it can be quite confusing to know where to start especially when it comes to finding a successful trader. The first place you can start with is established training platforms like Warrior Trading. Other platforms to check out include StockTwits or eToro.

Design a trading strategy

By now, you already know that trading requires sufficient capital. This will allow you to take advantage of leveraging large positions. One thing you need to remember is that when you begin day trading, your investments will not allow you to make super normal profits. Experienced traders have learned to make money on relatively small price movement either long or short. As said earlier, day trading is not a quick-get-rich-scheme, you need to implement various strategies with the goal of making profits.

These strategies will help you to determine the entry and exit points. Experienced traders are known to develop strategies which they stick to once they become comfortable with them. It is common to find successful traders trading with one or two stocks each day. Others will only trade a few of their favorites. The reason why experienced traders do this is to learn how each stock fairs under different conditions. They also get to learn how movement is affected by key makers in the markets.

As a beginner, it is important to take your time to come up with sound strategies and learn how they work. Do not change strategies rapidly just because today it made money and tomorrow it did not. Be patient and make sure your strategies include risk and trade management.

Practice trading on a simulator

It is common for beginners to be anxious to try out their newly learned trading skills in real world trading scenarios. What you need to remember is that in the real world, you may end up losing all your money just because you lacked patience, skills and knowledge. It is wise to take time and practice on a trading simulator.

Trading simulators are usually offered for free and the best news is that you don’t have to risk your capital. Virtual money is always available allowing you to come up with numerous strategies, implement them and watch how they perform. Trading simulators allow you to practice with real data finally reproducing the same experience provided by a real trading account and will usually have all the important indicators you need like moving averages and VWAP.

What can you learn from trading simulators? First and foremost, it allows you to become familiar with the trading software interface. Next, it allows you to learn the basics – its features and how to navigate. You can learn about portfolio, stock research, watch list and ranking. So, don’t jump this important step. While it’s like using training wheels, it helps to prepare you for real world trading.

Start live trading with small size

Now that you are done with training, it’s time to take off the training wheels and start trading in the real world. Do you remember the $5,000 savings? Well this will be your starting capital. I know you are very anxious to start trading but to avoid losing all these money; it’s a good idea to start slow. The best option for you is swing trading. What is this? Swing trading is a practice where positions are held no more than a day. It’s a fundamental trading concept that sits between day trading and trend trading.

As a beginner engaging in swing trading, you will get to hold a stock from a few seconds to a few hours but not longer than a day. While you may not make a lot of money as a beginner, you will not be exposed to volatility. It is common for beginners to desire profit making immediately they begin which means they may engage in margin trading.

These calls for investing more money than you have and it’s not a good way to start. This is because margin trading increases your risk. To be on the safe side, start with a small size until you are consistent and confident in your strategies.

Final Thoughts

Let’s face it, day trading is fun but its risky business too. Many traders fail within the first three months. To be successful, save cash for investing and for your education. This should be followed by seeking training from a professional broker, coming up with sound strategies, practicing on a trading simulator and finally trading live with small sizes. Doing these will surely set you on the right path to becoming a successful day trader.

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