What tips could be helpful to day traders of all types?

This can help you become a successful trader.!

Published in

Coinmonks

5 min readJun 3, 2022

Traders are unique people. Similar to entrepreneurs, traders work obsessively to master their specific skills. We’ll stay up late, wake up early, and repeat the process the next day — all in efforts of living an extraordinary life that most can only dream of.

These tips could be helpful to day traders of all types, both experienced and new to the market.

Performing Personal Audit

If you want to pursue day trading, you need to understand the challenges. You’re going to have days when you lose money. It’s going to take a lot of time to understand what you’re doing. Even once you understand different strategies and all the terminology, you still might not find success. Day trading is hard, and there’s no guarantee you will make any money at all.

Becoming a day trader is something that a lot of people see as an easy way to make money, where you don’t need much experience — just click a few buttons and hey, presto, you’re rich! But nothing is further from the truth. Day trading is a very difficult performance discipline, much like becoming a professional football player or playing a musical instrument to a virtuoso level. You first need to have a natural talent, followed by years of practice.

Having had over a decade of experience with derivatives trading, I can categorically tell you that day trading is a difficult task. It requires an analytical mind, and that many people she’s seen succeed have backgrounds in industries that require years of schooling and practice. If you want to become a day trader to get rich overnight, you’re going to end up losing large amounts of money. It takes time and practice to become an effective day trader.

That being said, there are day trading success stories. If you understand a marketplace and develop effective trading strategies, it’s possible to be a successful day trader.

Having trained multiple clients who’ve gone from cubicles with small trading accounts between $10,000 to $37,000 to successful, full-time day traders, making millions in just a few years, I have verified proof people can make the leap from their career to trading full time.

Research the market, strategies, and potential platforms

Whether you’re going to use the forex market, the crypto market, or any other marketplace, you need to understand how that market works before becoming a day trader. There’s an idea that being a day trader can make you rich quickly and allow you to spend most of your time relaxing, but that couldn’t be further from the truth. Succeeding as a day trader takes significant research and effort.

Researching the market and eventually developing strategies also requires learning from successful day traders.

The best way to become a day trader is to learn from existing profitable day traders, There’s an overwhelming amount of theoretical material on the internet about how to day trade, but nothing beats learning from someone who is currently successful at it.

Your research should also include finding additional detail on trading strategies within that market and regulations surrounding day trading.

Start small

Once you’ve completed sufficient research, it’s important to start small as Rothfeld suggested. It takes time to learn how to day trade, and putting a lot of money on the table to start is a big risk. The risk associated with day trading also means you should use money that you’re comfortable losing.

Day traders typically suffer severe financial losses in their first months of trading, and many never graduate to profit-making status, Given these outcomes, it’s clear: Day traders should only risk money they can afford to lose. They should never use money they need for daily living expenses [or] retirement, take out a second mortgage, or use their student loan money for day trading.

Since losing money is part of the learning process for many day traders, it’s a good idea to start slowly and learn as you go. It’s also important to stick to whatever trading strategy you’re implementing. One of the biggest mistakes day traders make is creating a well-thought-out strategy only to completely go against it in a rushed trade.

Quite often, day traders will take trades because they are just sitting in front of their screen all day, A forced trade is generally going to be a losing trade. Always follow your rules.

Understand the risks

Day trading isn’t easy, and there are several areas of complexity that require research for new day traders. If you decide to become a day trader, it’s important to understand that day trading isn’t a get-rich-quick scheme. You will lose money along the way, and not all your trading strategies will pay off as you expect.

To become a successful day trader, you need to be willing to put in months and years of hard work to understand the markets, develop a strategy and execute your plan consistently over time.

Tip: Day trading is not easy and by no means a guaranteed moneymaker. Researching the market, strategy, and patience are all important elements.

Day-trading strategies

We found a few trading strategies that are commonly recommended or used by experienced day traders:

Breakout: A breakout strategy refers to a sizable fluctuation, or a breakout, on a crypto price that has been relatively still for a prolonged time. For example, if a crypto coin has been between $30 and $31 for three weeks and suddenly you notice it’s either dipping or rising dramatically, it might be a good time to trade. That volatility should be enticing to a day trader.
Scalping: Scalping means you sell your crypto immediately after the trade becomes profitable. This isn’t too complex in terms of when to sell; it’s an easy way to get your feet wet with day trading. Scalping is also referred to as taking advantage of “the spread,” because traders are profiting off the difference between the sellers asking price and the buyer’s offer.
Momentum: Momentum trading is based on trending news and information. Whether it’s a new earnings report or different breaking news, day traders use news events to project rising and falling cryptos. This requires a good bit of research to do well, but it’s still a good option for beginners.
Fade: Fading is acting contrary to the prevailing trend that is apparent in the market. It is a high-risk strategy that bets against conventional wisdom. Is everyone investing in a crypto coin you expect to go belly up? Why not short it at its peak? The risk, of course, is that conventional wisdom can be a potent factor in the cryptocurrency market.

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