Day trading is an excellent way to make good money, but if you've heard it's easy or a form of passive income, you've heard wrong. You need to put some work into it.
Day trading commodities and stocks is more like a highly lucrative job. You need a number of firmly ingrained habits to be successful at it.
The first thing you'll absolutely need is a good sense of time. The kind of person who's not good in the mornings or needs that morning jolt from coffee will only make themselves miserable trying day trading. That's because the best time to decide how you'll be playing the market today is right before opening bell. That's at nine in the morning in New York and six in the morning in California. If you're living in Hawaii or Alaska, it's five am. Of course, just being an early riser isn't enough. You'll also need to have a good internal clock and a solid scheduling system.
The second necessary habit is having good quantitative thinking skills. Working on hunches will allow you to make or lose money in day trading. You need to be able to read and understand the numbers without thinking about them if you want to make good decisions. You have to be able to convert and analyze the numbers in your head carefully, so you'll be able to tell if something is a blip or a lasting trend, and you have to be able to act accordingly.
I should point out that you don't have to be a mathematician to do this. You can learn how to analyze the numbers correctly, even if you're not fond of math. There are quite a few numerical skills that can turn into second nature, as long as you get well into the game.
Habit number three is maintaining good observational skills, being incredibly patient, and learning to forget. This can be pretty hard, since you have to keep yourself from feeling let down when you don't catch a stock at its top, or when you lose money on a short sale that never turns up. Don't get caught up in either your wins or your losses, or you'll lose focus and money.
Dedicated research is habit number four. You won't have to consume accounting statements the way someone in long term conventional investing does, but you have to constantly be getting new data and analysis. You also have to be proactive about your buying and selling, and make fast, accurate judgments, then act on them just as quickly. The only way to make the correct decision is to have the right research. Just don't let it paralyze you.
Remember that you don't actually have to analyze most of this data or do most of this research. That's because the best traders have access to plenty of tools, including a number of different data services and research tools.
If you're thinking about getting into day trading, you'll also need to build up a support network. That requires dealing with a broker, as well as finding investors who will help you apply leverage to the market. You have to understand that this is work, and that this kind of work requires intelligence, focus, and a strong will.
If you've got all these skills and can develop these habits, day trading could be a great way to make a fantastic income. This is a job you can call fun honestly, and it can be pretty enriching, too.
Day trading commodities and stocks is more like a highly lucrative job. You need a number of firmly ingrained habits to be successful at it.
The first thing you'll absolutely need is a good sense of time. The kind of person who's not good in the mornings or needs that morning jolt from coffee will only make themselves miserable trying day trading. That's because the best time to decide how you'll be playing the market today is right before opening bell. That's at nine in the morning in New York and six in the morning in California. If you're living in Hawaii or Alaska, it's five am. Of course, just being an early riser isn't enough. You'll also need to have a good internal clock and a solid scheduling system.
The second necessary habit is having good quantitative thinking skills. Working on hunches will allow you to make or lose money in day trading. You need to be able to read and understand the numbers without thinking about them if you want to make good decisions. You have to be able to convert and analyze the numbers in your head carefully, so you'll be able to tell if something is a blip or a lasting trend, and you have to be able to act accordingly.
I should point out that you don't have to be a mathematician to do this. You can learn how to analyze the numbers correctly, even if you're not fond of math. There are quite a few numerical skills that can turn into second nature, as long as you get well into the game.
Habit number three is maintaining good observational skills, being incredibly patient, and learning to forget. This can be pretty hard, since you have to keep yourself from feeling let down when you don't catch a stock at its top, or when you lose money on a short sale that never turns up. Don't get caught up in either your wins or your losses, or you'll lose focus and money.
Dedicated research is habit number four. You won't have to consume accounting statements the way someone in long term conventional investing does, but you have to constantly be getting new data and analysis. You also have to be proactive about your buying and selling, and make fast, accurate judgments, then act on them just as quickly. The only way to make the correct decision is to have the right research. Just don't let it paralyze you.
Remember that you don't actually have to analyze most of this data or do most of this research. That's because the best traders have access to plenty of tools, including a number of different data services and research tools.
If you're thinking about getting into day trading, you'll also need to build up a support network. That requires dealing with a broker, as well as finding investors who will help you apply leverage to the market. You have to understand that this is work, and that this kind of work requires intelligence, focus, and a strong will.
If you've got all these skills and can develop these habits, day trading could be a great way to make a fantastic income. This is a job you can call fun honestly, and it can be pretty enriching, too.
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