3 Steps I’m Taking to Become a Better Daytrader
Day-trading on the stock market can make or break people. I know first hand due to my attempts to build a small account. Options trading is my game, and it is a rough one. Patience, determination, and a whole lot of comfort food is your best friend when it comes to trading options. I’ve taken a little break to rethink my strategy, so here are the 3 changes I will implement
- Refine my strategy
It’s no surprise that you need a strategy if you want to be successful. My approach is playing the bounce. Most traders You see on YouTube will play the break. I’m not a big fan of that because I’ve seen so many false breakouts. Bounces are bound to happen, and it’s just a matter of timing them.
Of course, the big question is, how do you time them? Usually, I would play any bounce off a key level. Whether it was off the Volume Weighted Average Price (VWAP), the 50-day moving average(50MA), a support/resistance, or the 9-day exponential moving average (9-EMA). However, recently I’ve learned that not all bounces are created equal.
I have refined my strategy so that I only take bounces off of the 9-EMA. Experienced traders will say this is a mistake because the other key levels are “better”. After A year of doing this, I’ve seen that price action almost always bounces off the 9-EMA the first time it touches. Therefore, I will trade the first bounce off of the 9-EMA.
2. Address my fear
Fear is rampant throughout the entire stock market. No one wants to lose their money off of one bad trade. My fear weighs me down a ton when I’m trading options. It is healthy to have a little bit of doubt when trading stocks and options. Healthy as it may be, it still gets in the way of profits.
Addressing this fear will not be easy, but I will combat it by relying on my experience. Understanding that I am not a new trader anymore is key to my success. Having been through the trials and tribulations of trading, I should be more confident. Trading is scary, yes, but I can’t allow that to hold me back.
3. Improve my primary source of income
Income is the reason why we all trade on the market. Everyone wants to be the hotshot day trader who can make 50 grand in 2 hours by only pressing buttons. My goals are similar but more realistic. Ideally, day trading can become my primary source of income as it is very time efficient. I’ve realized that it is better if trading is not your primary source of income if you have a small account.
Uber was what I used as my primary income previously. There is nothing wrong with using Uber to fund your account, as it is a good source of income in the short term. In the long term, it has many faults and is not sustainable, which is why writing will be my long-term source of primary income. A well-established freelance writer can make anywhere from $100,000 to $300,000 a year.
Improving my primary source of income will get rid of the pressure of performing when I trade. Pressure to perform good trades leads to impatient trading. Impatient trading leads to breaking the rules, which leads to losing money. Big accounts don’t usually feel this pressure since they have already performed.
In closing, my trading journey is far from over. In fact, I’m willing to say it has only just begun. Once I act on these changes, my luck will turn around.
