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Day Trading Full Time

24/05/15

Day trading for a living can be one of the most fulfilling things a person can do. However, it can also be one of the hardest. Advice for day trading prospects.

 

 

 

 

    Current Day Traders Advice

 

 

 

 

 

 

 

    Only Trade With What You Can Afford To Lose

 

 

 

    Is It Worth The Stress And Steep Learning Curve?

Day Trading Full Time

 

Introduction

 

Current Day Traders Advice

Most new traders will start by following some sort of online community. There are numerous resources for day traders online and one of my favorite starting out was elite trader forums. The only problem with the online trading communities is that it is often full of failed traders still waiting to make it. These guys will impart their words of wisdom in an encrypted manner making their advice more philosophical than anything tangible. You will have the naysayers informing you that day trading is a suckers game and that 99% of day trader lose.

If you are objective and quite good at reading humans then you will slowly start to learn who the professionals are from the frauds. I always spot the professionals due to their easy going humble nature even online (anonymity brings out all the trolls and sadists). The professionals never act like they know everything, they simply state they have a proven plan and they try their best to execute it every single day methodically and unemotionally (human psychology of trading is what drew me to algorithmic trading thereby eliminating any human weakness).

My advice would be to do your research on any poster on any online community - read through their past posts and responses from other well know posters to gauge the authenticity of the trader. Still recognize that these traders will not give away their hard earned strategies but they often do impart sound advice and solid trading plans.

 

Why Individuals Want To Day Trade For A Living

 

What To Expect When You Make The Transition To Full Time Day Trading?

When Should You Make The Transition To Full Time Trading?

My advice to any new day trader is do not become a full time trader if you do not have any other source of income (could be part time job or small business on the side). When you start out day trading make sure your living costs and overheads are at an all time low, do not expect to make money day trading if you are forced to make money to pay your rent. Keep costs to a minimum and that way you won't be forced to make silly trades just to pay of some bills. I would even go as far as to say live with friends or families for free if you can as this will give your trading an advantage when you first start.

Do not give up your job until you have at-least 1-2 years of somewhat profitable day trading behind you. If you have been making swing trades whilst doing your full time job and then feel you can take up day trading full time then please STOP! Day trading and swing trading are two different animals, most people rarely make money on both.

When i started my day trading i was young with a good College Degree behind me, so even if i failed i had other opportunities. I lived with friends and had a full time job at that time and i kept my costs very low. Being from the UK i would work my full time job and then start day trading US markets when i got home - after a couple of years and after having saved enough money for a decent sized trading account and the ability to live for the year without working i made the transition to full time trading (i still kept a part time job on weekends so as to have a consistent stream of income still flowing in).

 

Day Trading Results

To be brutally honest i would have to say most day traders will lose money - and this is not because they are not smart enough or willing to work hard enough. It is simply because trading is gambling and gambling brings out the worst in humans. Not having a proven plan, not following a plan, getting greedy or fearful will always lead to a failed day trading career. However, if you followed my advice on when to transition to full time trading then at-least if trading does not work out for you it wont be the be all to end all. You can always go back and get another job or if you have another business on the side you can begin focusing on something that is making you money instead of being huge drain on your resources.

After the initial education phase of trading being to look at it as the business phase. Don't waste your time continuing trading if your profits are small and the opportunity cost of getting a much higher paying job is to high. If your business is not working and you have tried for a number of years then don't waste anymore time or energy on a failed venture. Learn when to cut your losses and move on, always keep in mind that most new business fail anyway and trading is nothing different.

 

 

 

 

Only Trade With What You Can Afford To Lose

Never trade with borrowed money or money you need for rent. Don't start with an account size which is far to big as most new traders are likely to blow up an account or two in the learning process. Don't get greedy and view your initial years of trading as an education. If you are financially comfortable before you begin you don't need to force an income from your trading which will lead to better results. I have rarely seen a successful trader not lose money in their first couple of years of day trading - understand this for what it is and aim to keep your losses as small as possible.

 

A famous quote by legendary investor Paul Tudor Jones was, "Only losers average losers", take heed of this snippet of wisdom as averaging down losing trades for any beginner trader is a recipe for disaster. Not only is it a bad trading habit but because averaging down can work many times before the ultimate blowup. it makes traders think it can be a viable day trading strategy, when in fact it is not.

I have seen the scenario a million times where a trader makes a trade only for it to go against him, he then adds to the trade and see it further go against him. Then the obligatory curse words and statements of fact saying, 'this market is crazy, this move is crazy, there is no way this won't come back". Well please don't become this guy because markets are seldom crazy and strong trends will go keep going far longer than you can remain solvent. I view the market as evil sadistic entity trying to 'squeeze' as many traders as possible at all times. The market is hardly ever wrong and only your position is wrong. Keep a level head and good money management and you should never fall into this trap.

 

Is It Worth The Stress And Steep Learning Curve?

Is It All A Dream?

Successful day trading is a dream very few will achieve, but then again so is any other successful business. I would never tell any individual to not aim to achieve their dreams as long as they are prepared and understand the risks and uncertainty ahead of them. Ultimately you will never learn day trading from anyone else (unless you have excellent mentor) and will have to try to make your own understanding of financial markets and how to expose certain underlying inefficiencies which allow you to profit.

Actually the most important advice i would give any new day trader would be to learn to code your strategies, that way you can easily make the shift to the less stressful and more lucrative automated trading business. Trading is nothing but a series of rules on when to enter, place stops and targets. These rules can all be broken down into code and you can then apply these strategies to 100s of different markets or oven create numerous uncorrelated strategies.

Take a chance if you are well prepared and position yourself for a roller-coaster of a ride.

 

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