Day Trading And Earning A Living - How Can I Do That?
Many people wonder whether it is even possible these days to day trade for a living
? There are plenty of people who make their livelihood and then some using various trading strategies and systems in this volatile market. So, it is definitely a possibility. It really depends on how serious you are about taking this challenge up.Trading successfully is not and has never been an easy process. A lot of newbies meet with short-term success and get lucky in the beginning. That's when they start thinking that they are smarter than the market and they can actually beat the system. A wise investor once told me - 'The worst thing that can ever happen to a new trader is that he or she makes money with the first trade'. That statement speaks volumes. In simplest words, the earlier a trader realizes that you have to make mistakes while learning the ropes and the real key to making profits is to cutting your losses short and taking your profits off the table while not getting too greedy. Lets break this down to a more structured approach.
If I were to start all over again, I would focus on the following three areas while starting out:
1) Education
Learning before you start trading out is essential. The ideal program if you do go to school would be a combination of theory along with application. For example, if you were taught about different chart patterns, then you should be given an opportunity to look over 50 companies stock charts and identify when such patterns occurred and whether the theories held true or not. Theory without application is like having a degree without any need to apply it. You have to learn before you start to earn.
2) Apprenticeship
There are a few exceptional traders in every era. Its not easy to get some face time with any of them. But, if you want to succeed at this profession long-term, you should definitely try to start working within the firms of these successful traders/money managers. Model your actions and thinking like them and your results will soon follow. This is definitely the fastest way I know to succeed in this profession.
3) System
Once you have gotten your feet wet, learn and apply the strategies of 'your' system. As you get older your system might change and you will make slight modifications here and there. Overall, most of it should stay the same. Don't deviate from it unless you have extremely important reasons to do so. Seek the advice of your mentors before you change things up. Others will see things that you don't and vice versa.
4) Control
Control over self is the hardest but perhaps the most important thing to master. This is a lifelong battle that is fought between your ears. Learn how to win at this consistently. Your profits depend on it. Its not going to be easy but without understanding the psychology of investing and how it relates to the market, you are not going to make it.
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