We are in the midst of one the most severe recessions in history and yet there is still an opportunity to make money and be successful. I have personally seen a man go from nothing to wealthy within the last two years with just the stock market.
But why Day Trading? Isn’t it gambling?
In this blog post I’m going to clear up some common misconceptions about day trading and also explain why it’s very easy to get started. Those who blindly throw their money at the stock market with no plan or strategy are gambling. Is it not gambling if you have a plan of attack (a plan that gives you an edge over the market not just “trying to make money day trading”).
The first part of developing your plan is finding a strategy that works
You can either create your own strategy from scratch or find one that is already proven to work. Creating your own strategy is no easy task. You have to do countless hours of back testing and research to find the right combination of probabilities and indicators. Finding a strategy that works is also no easy task. With all the information on the internet it’s very hard to decipher what works and what doesn’t. I was fortunate enough to team up with a friend early in my career to develop my own stategy which I currently use in my own trading.
I will be sharing that strategy and more day trading tips at my Day Trading Website
Make sure the strategy you decide on incorporates both high probability and a solid risk structure. You obviously don’t want to use a strategy that only wins 30% of the time, if it does then make sure your winners are bigger than your losers. You also don’t want a strategy where you risk a lot to gain very little (risk $100 to only gain $10). Be mindful of the ever changing market environment, volume and volatility are always going to change.
Can your strategy withstand a sideways market with very little volume? Do you want to trade smaller timeframes to catch every move in the market or larger timeframes to catch bigger swings? Make sure your strategy can adapt with the market environment otherwise it’s useless.
Now let’s talk about investment, there are strategies out there that cost anywhere from $2,000 to $20,000. Compare that to opening your own business or franchise. A McDonald’s franchise is rumored to cost around $1 million and Subway roughly $100,000. You can find business to open that cost less than that but the point is that it doesn’t cost that much money to get started day trading.
Your initial investment with day trading is minimal in comparison to most other businesses.
Consider learning how to day trade story, I took out $25,000 in private student loans when I was in college to buy a strategy and have capital to trade. While you do need money to day trade the biggest investment with day trading is time. And I will be up front its not easy learning how to be a day trader.
The time it takes to learn a new strategy really depends on how much time you want to dedicate to it. Very few people have “the instinct” for the market to be able to know exactly when to get in and out. Since trading is a performance activity most traders have to develop their skill in the market. Find a coach that will help you study and review your trades to fix your mistakes. The more you’re able to study and review, the easier it will be for you to become a professional day trader.
The biggest tip that I can give you is never to take shortcuts. Once you take shortcuts you develop bad habits and those are very hard to break. We have been able to teach many people how to become WanderingTrader’s as many people want to day trade and travel around the world.