Written by: George Papazov, founder and CEO of TRADEPRO Academy
The idea of making a full-time career out of day trading is an exciting possibility for those just starting out in the industry. Day trading is a high-pressure job, but it’s one that provides an opportunity to work from home, become your own boss, and reap financial rewards over time. It also takes a huge amount of work and a strong understanding of changing market conditions.
In my experience working with thousands of new day traders through TRADEPRO Academy, successful traders share similar qualities with professional athletes – they stay calm under pressure and thrive in a high-stress daily environment. If you’re thinking of starting day trading or have already begun a career yourself, here are some tips to help avoid common pitfalls and achieve realistic success. For help along the day, check out my daily YouTube video market update:
Start Simple and Build a Strong Foundation
Start simple and give yourself the tools and time to build a strong foundation. To give yourself the best chance of success, take the time to learn the ins and outs of the business, including the market structure, understanding how markets move in repeatable cycles and what those cycles are.
New day traders will benefit from reading chart patterns and understanding what they mean for both buyers and sellers. However, the most fundamental thing to understand about day trading is that the market is an ever-changing environment – a constant battle. You need to be able to read the story, see who’s winning and recognize when momentum changes to deliver both short and long-term success.
Think Long-term, Not High-Risk
In the beginning, you’ll be quickly introduced to the high-risk/high-reward investment strategy. There’s a famous saying that sums up these methods “there are old traders, there are bold traders, but there are not old and bold traders.”
You will benefit far more from thinking long term by creating a trading plan, managing risk and practicing strong discipline than starting out fast with high-risk strategies. By planning for the long-term, you will be able to focus on small wins and gradually scale up your success. When you master the art of consistency, you will not need nearly as much leverage as you think to show short and long-term wins.
Don’t Buy into the Claims
It’s easy to get drawn into some training sites with the claim that “millions of dollars can be made by just investing a few hours a day.” While it can be done, it’s highly unusual at the beginning and should definitely not be the key motivator or measurement for success for newcomers.
It’s a common entry level mistake to start with the goal of massive profits right off the bat. In my 20 years in the industry, I’ve only encountered a handful of people who have achieved that extraordinary success from the very beginning of their trading journey. While you may get into the game for the final destination, it’s important to remember that it’s also about the climb. It takes years of trial and error, learning, self-evaluation and celebrating the small victories to earn career success as a day trader. While you’re on that journey, remember that today’s knowledge is tomorrow’s profit.
Practice with Live Capital not Demo Trading and Stick to the Plan
While managing your own expectations to start, it’s also important to understand that focus, mindset and psychology are just as important for beginners as methodology. Many new investors spend way too much time in simulated trading accounts, learning bad habits that will be detrimental when working with live trades. It’s better to handle the nerves and start with live capital but invest with smaller amounts when just starting out.
The most crucial investment tip any beginner trader can equip themselves with is this: have a plan and follow the plan. What works today won’t tomorrow, so you need to be dynamic, constantly adjusting your strategy, but sticking with your long-term plan. Humans are not naturally wired to be good short-term investors. Our emotions are always a risk, unless you are disciplined and follow your plan.
George Papazov founded TRADEPRO Academy in 2012 Papazov to inspire, educate and empower at-home traders and investors. A self-made millionaire and entrepreneur, Papazov’s self-published book Path to Profit: A Trader’s Journal reached Amazon bestseller lists. With seven years of work for a major international bank he is now an industry-leader in trading currencies, stocks, options and futures. Papazov provides a daily Morning Market Video Update to 39,000 YouTube subscribers, on topics from OPEC to stock updates, breaking market news, and Brexit to interest rates. His popular video training tutorials include TradingView Tutorial and How to Use Fibonacci Retracements. Papazov lives in Toronto, Canada.
DISCLAIMER: Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks and options may fluctuate, and, as a result, clients may lose more than their original investment. Prior performance is not indicative of future resuls.
None of the content published on TRADEPRO Academy constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter.