True or false? The day trader’s lifestyle is an exciting one.
You sit for half an hour in front of your trading station, make a few thousand dollars, and then spend the rest of the day partying with friends or lying on the beach and catching some rays. If traveling, you bring your laptop with you, do a little trading on the side, and make some money while living it up at a fancy resort.
Well, we are sorry to disappoint you, but that is not how it works. Unfortunately, day trading is not that easy and to reach the point where you are going to make money with your day trading, you will need to work very, very hard. In this blog, we will review some of the most important things you need to do in order to become a successful day trader.
1. Create a Plan
You must plan out in advance your training and education program. You cannot simply open a trading account with some broker and start trading (and wasting) your money. In fact, if you do so, we can guarantee you are going to blow up your first account faster than you can ever imagine. To succeed in day trading, you need to study and learn, just like for any other profession. Make sure to have a plan set out that documents how you want to go about pursuing this career. With that said, you may wonder how to go about planning a training program before knowing much at all about the subject matter.
You should start reading some books. Learn all that you can about day trading and how it works. Once you understand what day trading is, you will know if it is something you want to pursue.
After doing some reading and studying, if you still believe day trading is something you want to continue investigating, you should watch some videos of “real” people trading and talking about their own journeys to become successful traders. You will find much free educational content on our YouTube channel.
2. Prove to Yourself You Can Make Money Before Making Money
Does that sound weird to you? How do you prove to yourself that you can make money before making money? There is a way! You can actually practice day trading without putting your real money on the line. If you believe you have covered all the basics, and still believe day trading is right for you, now is the best time to open a simulator account and start paper trading.
3. Find a Community to Join
You can certainly trade alone but it is not the best way. Picture yourself for a moment. You are sitting in front of your computer the entire trading day, alone, all by yourself, watching stocks moving up and down in price, waiting hours for a good setup to appear, and then, when it does, executing it and, rats (!), losing some money. At home, alone, you will have no one to discuss your trade with. Did you do something wrong? Or, was it a great trade which simply did not work out? A community is a place for traders to in part discuss their trading ideas and news about the markets, as well as share their trades and experiences.
New members can learn much from the community’s moderators and experienced traders. A trading community is an excellent way to get help and feedback regarding any trading-related issues you might have. Likewise, experienced traders can enhance their own knowledge by sharing their ideas with other traders. Along with all of that, being in a community means there are lots of eyes watching the markets! It is difficult to keep an eye on many individual stocks, but by being in a community with many members, you can be alerted whenever there is some interesting price action developing on a particular stock.
In reality, being a full-time trader can be boring, exhausting, and stressful, especially when you are doing it alone and, even more so, when you are suffering through a losing streak. Being in a community provides you a place to talk to other traders who have faced the same type of challenges you are. A chatroom can cut your learning curve in half, if not more. It is always better and easier to work together with other people who share your passion. If you are interested in joining our Bear Bull Traders community, please go have a look at our membership levels.
4. Journal Your Trades Regularly
As we indicated above, day trading is not easy. You will need to have time to do some homework. By the end of each trading day, you should have taken screenshots of all of your charts with all of your trades marked on them. At the end of each week, you should make some time to review them. Each day, write down notes on why you believe the successful trades worked and why you believe the unsuccessful trades failed. No matter how experienced we might believe we are, we all still need to do our daily homework because journaling is the key to success in the long run. There are many different ways to journal. You will find a good selection of journaling templates along with some actual traders’ journals in our forums.
5. Trading Software
Do you think you are ready to day trade? If so, it is time to open an account with a broker. Without a broker, you cannot trade stocks. Selecting the right broker can be confusing as there are many brokers out there to choose from. You do not have to worry about it though! We have done all of the hard work for you and compiled a list of trustworthy brokers which we ourselves use for day trading. You can learn more about them on our Trading Tools page.
A broker is not the only thing you will need in order to day trade. You will also want to get a scanner. Why do you need one? Because you cannot simply trade any stock you wish to. By the time you finished step two above, trading in a simulator, you will have learned that we trade Stocks in Play. Scanners are one of the best tools we use to help us find those Stocks in Play.
Do note that being a member of our community will give you access to view our Trade Ideas scanners for free!