If you’ve decided to learn to day trade, congratulations! Sure, the learning curve may be steep, but the benefits are numerous.
Along with learning basic day trading strategies, there are a few other things you’ll need to know. Here are some tips for learning how to day trade:
Learn to be fast on your feet
It’s no secret that day trading is fast. Really fast. Think about when you play chess. One of the ways you can make it harder is by adding a timer, since it’s much harder to think well when you’re under pressure.
When you’re day trading you may only have a few minutes or seconds to make your decision, so take your time practicing so you can learn to make smart decisions under pressure.
Manage your money
When you’re practising day trading in a simulator it may feel super easy, since it’s not your money. But you need to treat it like it is your money, calculating your profit and loss in your head as you go. That means that you can easily assess risk reward ratios, executing only the best opportunities as you go.
Even when it’s not real money, you need to treat it like it is, which will make it much easier for you to do the same when you’re in the real world.
Learn to win and lose
Trading is amazing when you’re winning, and not so amazing when you’re not. Some days you’ll be up, others you’ll be down, but carrying these feelings from one day another will hurt you. When you’re practicing, learn to get into a rhythm, approaching each trade with the principles and strategies you’ve learned, and a positive mindset.
Practice Practice Practice
Have you ever heard the theory that in order to master a skill you need 10,000 hours of practice? That’s 10-15 years of experience depending on how many off-hours you practice. It’s simple math- the more you practice, the better you’ll get.
So much of our skill lies in the way we feel about ourselves. Sure, you need to research the market, but you may notice yourself looking back and saying “man, if I had been in that trade I would have made so much money.”
One of the best ways to prove to yourself that you have the necessary skills is to use a market simulation environment and ensure you’re using real tick data. That will help you overcome that voice in your head that tells you you’re too old/young, uneducated, dumb, or whatever.
Once you’ve proven to yourself that you do have what it takes, you’ll notice a huge boost in your confidence when it’s time to do it for real.
Work out your salary
It is possible to estimate your annual income, and this is a great way to help yourself treat day trading as a career. Spend some time going over your money and set your goals, and you’ll be more likely to show up and act like a professional.