Day trading is like a fascinating game that rolls chess, poker, and gaming into an exciting package, adds the adrenaline rush of a roller coaster, and flavors it with a few dashes of lemon and a pinch of salt.
Trading is a great struggle between illusion and reality, and in many ways, a cruel maze of tricks within tricks. However, if you are one of those who can create a plan, follow a strategy with strong discipline, handle your gambling demons, and accept trading as a profession, you can possibly make it... after 3-5 years of hard study.
Trading attracts people who love a challenge. However, only a lucky few can stand out from the crowd and make a fortune out of thin air. These people need to have a vast amount of experience, know how to keep their cool in the face of natural greed/fear impulses, and be savvy about the psychology of the masses. They need to gather some initial trading capital, but also have some money in reserve for critical situations and slump periods, because these are statistically proven to happen to all traders - it is just a matter of time and cardinality of trades.
Knowing when not to trade, when to take a break and step back is a critical part of risk management. Most of all, you need a working trading system that suits your needs and trading style.
If you have all of these, the last piece of the puzzle is to embrace the following tenets:
What the life of a day trader is like: an interview with a successful Sovryn trader, who wishes to remain anonymous.
I actually didn't get straight into trading at first. I was participating in classical hardware and cloud mining for cryptocurrencies, and then doing some minor investments, which led me into stock market trading. After that, back in 2016, I learned about crypto trading, and I can say it was a blessing, since I could use existing methods used in the stock market that worked pretty effectively in crypto, too.
My first experiences with trading were unusual. I made quite a bit of profit during several week-long periods without any knowledge but inevitably broke the streak then and suffered brutal losses. Many people quit after losses, but in your trading failures, you can gain plenty of experience to become a success. That's why it is important to journal your losses and find what connects them, fix the issue, and move forward.
I agree some people do get drunk on trading in crypto because it is such a speculative market, but in the stock market, it's a lot tougher.
It depends on the person and their lifestyle. The traits you grew up with can naturally make you a successful trader. So I don't think it's measurable in time, and it's really about who you are that determines how quickly you can adapt to the market.
Discipline was the only thing I needed to learn. As soon as I realized the importance of discipline and persistence, I started to grow and become what I am today as a trader and as a human being.
Tough question, but again it can be summed up as discipline, patience, and persistence. Many people fail a couple of times and fall for what's called “revenge trading”, which means irrational trading after you lose, hoping you get lucky and win back the losses quickly. But as you can guess, they will only go further down the spiral most of the time.
It is also critical to absorb a lot of knowledge that will help you to create your own opinion. When you start to listen to your inner voice while following the plan, you are on a good path. Only following others simply gets you nowhere in the long run.
Then, hide your Profit and Loss (PNL) indicator. (PNL is the difference between profit and loss in trading.) Don't observe the money you may be gaining or losing; trade the setup, not the PNL.
FOMO (fear of missing out), greed, and not following your backtested trading plan. But if I were more specific, it would go like this:
To fight these demons and get rid of them for good, avoid these pitfalls and give yourself a point for each successful and flawlessly executed trade. You are cured when you have five positive points at each of these. However, If you collect ten bad points for a single item mentioned below and you cannot stop, you are probably doomed to be a non-trader.
Always try to protect your capital. Trading is one of those professions where you need to have both skills and capital. Without money there is no trading. Also, you need some money to back yourself up.
At least a month of paper trading to start. Then, develop 2-3 strategies and backtest them hard on at least 100 samples. Then start with 1% of your capital per trade. You can move this up to 3% per trade but only if your hit rate is about 60%.
Of course, there are traders that have 85-90% hit rate. These guys trade big numbers and the only thing they need other than meeting trade conditions is to have enough liquidity. Trades like this usually have from 0.8 to 1.3 R (Risk/Reward Ratio) while not using much leverage.
I use many things now since I like the effect of pulling a lot of Aces from up my sleeve. I'm always trying to add essential books to my library and use something new here and there.
Currently, I trade crypto using Elliott Wave (EW), Price Action (Pat) combined with some basic Candlestick knowledge, and some Moving Average (MA) strategies.
In the stock market, it's a bit harder, so I use Volume Price Analysis (VPA), EW, Candlesticks, trendlines, and some chart patterns even though some of them are getting obsolete. It is also good to have a basic overview of the news that moves the market. However, I am not a “news” trader.
Do it for yourself, not for the money.
Really, the best thing about trading is it can teach you a lot about the values of life that will guide you to a better lifestyle. A better lifestyle then morphs you into a better version of yourself, and as the better version of yourself, you can make the people around you happier.
Personally, I get a lot of these values from a fellow named Jim Rohn, who left his teachings for the world to learn from. He was an avid businessman and motivational speaker who amassed a vast fortune from nothing.
Then also, don't try to make each day a trading day. Sometimes you can observe the market and not make a single trade since the stars don't align in your favor. Never trade when you don't have an edge.
Trading is like poker with one critical difference. In a game of poker, you need to play each hand with cards you got. In trading, you can wait for the proper hand and then trade it perfectly. If you have a will to win, of course.
Well, my greatest win would have to be everything compounded that I've acquired over time, but the most in one single trade, if I can remember, is 2500% on a leveraged BTC position.
I've lost it all before, so nothing can be more of a failure than that. But I believe that failures will give you the experience to succeed.
There aren't any secrets. All the information is out there, and most of it is free… However, you need to be passionate about what you do no matter what it is.
If you don't like what you're doing, you're not going to be successful in it. That's what I believe, but I do have a passion for the art of trading. And yes, I do like the money that comes with it, but I love the ability to predict. It might seem cheesy, but it's like being a wizard and seeing into the future a little bit. Sure, sometimes I'm wrong, but those times I'm right are just great.
Then, of course, learn to anticipate, not participate. Stop chasing pumps or the moves that are already on the go - good traders don't trade because something is moving. Your time to enter this was 5 minutes ago. You can jump into a trade for a quick grab and go, but if you stay in it, you are just sacrificing your capital for somebody else's success. Do the opposite. Start laughing at the chart and be glad that it is going so well without you. Then, prepare to trade the retest, since almost every good entry is retested at some point.
Then, you have to learn to have patience with great trades, but also imperial impatience with trades that don't look good or that are eating through your stop-loss (SL) zone. Observe, adapt, execute within a few seconds. It's all about doing non-stop quick adjustments as the situation develops.
And lastly, be aware that as a retail trader, you are easy prey for Market Makers (MM), when trading on emotions. To be successful in the market, learn to move with MM, resist their calls to sell, when all they are doing is selling a ticket to “destination fucked” for as many traders as possible before they do the counter move. Defeat the market by defeating your emotions and your urge to trade first. Then, be patient and execute as your backtested setup showed you.
Exactly. You need to love what you do and be ok with doing it on your own. Only then can you do it for endless hours and still feel full of life and motivation.
Well, it's just like any other person's day except for the fact that I don't drive to work. I walk across the hall to my office. I wake up at 5 in the morning, take a shower and get to the charts, watch pre-market for stocks, and check my overnight holds for crypto.
Then, I do a few hours of trading, and sometimes I don't trade if the opportunity isn't there. I'm only really working for 1–2 hours, and I usually just read until something pops up. Some days I don't even bother checking and go out for the day. I like to keep my life balanced between work and play.
Lots of reading and knowledge from people who have been successful in the field. As a kid, I read The Richest Man in Babylon by George Samuel Clason, and this was my gateway to more comprehensive books like Trading in the Zone by Mark Douglas.
For self improvement, I really enjoyed Master Your Hidden Self by Serge Kahili King and The Truth by Neil Straus.
Don't wish for things but make sure you are doing the maximum to make it happen. And of course, enjoy what you do. If you don't enjoy what you do, it will be hard to get through the part in which you are not profitable and you will mostly give up.
And maybe also that the pain is temporary, while the pride is forever.
Thank you, my friend. Well said.