I know, I know, you’ve read all sorts of day trading guides and instructions on the internet. You probably have seen quite a number of YouTube videos stepping you through the process.
Well, I wanted to do something a little bit different because people tend to process investment information in a certain predictable way. They look at the things that they should be doing, and they get all excited about the potential earnings they could be enjoying.
This is all well and good. In fact, this is how most investment opportunities involved in day trading are presented.
There is no shortage of day trading courses available online and offline, but here is the problem: they give you rosy predictions. They paint a picture where everything is going right. They play up the kinds of profits you could be making. They emphasize the positive.
This is all well and good, but this conceals a serious issue. People are not, generally speaking, proactive. In other words, people usually don’t become masters of any kind of subject matter based primarily on passion.
This works against them because while they can learn, they usually learn enough to start doing something. It doesn’t matter what it is. It can be basket weaving, it could be learning how to bake fudge brownies or, in this case, learn how to start day trading.
Unfortunately, partial information oftentimes is just as bad, if not worse, than completely no information.
Make no mistake about it, if you’re trying to figure out how to start day trading, the worst thing that you can do is to go to some sort of hyped up, exaggerated seminar presided over by a salesman.
Make no mistake, those people who hold those seminars are not doing it for their health. They’re definitely not doing it because they have nothing else better to do.
They hold seminar after seminar trying to pull in as many people trying to figure out how to start day trading because they want to make money. They’re doing it for profit.
Now, there’s nothing wrong with the profit motive, but here is what you need to be guarded about. When somebody is trying to hype you up so you are so pumped up and so excited about doing something, chances are, you are not in the right emotional state.
You’re not looking at the big picture. Instead, you are focused on some specific outcome.
There’s nothing wrong with having goals. There’s nothing objectionable about actively seeking a specific outcome.
All of us have goals. All of us are working towards some sort of outcome. It’s not the end goal that’s the issue. The issue is the context.
You have to have a good working understanding of what’s involved. You have to weigh the advantages and disadvantages. You have to know when to come in and when to get out.
Unfortunately, when you are trying to get started with day trading, it’s very easy for sales people to just get you pumped up about how much money you could make. They can talk a good game about how quick it is and how easy it is.
Well, here’s the problem. The people who make it look easy are able to pull off successful trades one after the other after they have paid their dues.
That’s right. They have failed several times before. They have lost money many times before. That’s how they got to where they are.
Make no mistake, failure is just the dress rehearsal for eventual success. You have to pay your dues.
The problem is, when you go to these seminars or you watch these YouTube videos or read these heavily hyped books on day trading, you don’t get this context.
Instead, you see story after story of people just going in, doing a few trades, and then ending the day in the black. They do this for thousands of dollars for the rest of the year.
That is not a realistic picture. Real “gurus” get bloodied up from day to day. In fact, we’re talking about thousands of dollars in losses.
Now, when you average it out, they end up making a lot of money for the month. But it does nobody any favors to discount the days where they get their financial noses punched in.
This is why the worst way to figure out how to start day trading is to get all caught up in these types of materials.
It doesn’t matter what it is. It could be a video series, it could be an online course, it could even be an e-book or some sort of booklet. If you come across materials that give you the impression that day trading is somehow a quick trip from Point A to Point B in terms of financial success, you are being taken for a ride.
I don’t want to sound conspiratorial; I don’t want sound like I’m hating on these experts, but let us call a spade a spade. They get paid when people are excited.
They get paid when people buy their programs. They get paid when people are so pumped up and motivated that they buy product after product.
At the end of the day, they’re all about getting paid. This is completely different from your interest.
Your interest is to learn. And let me tell you, there are lots of hard lessons out there that you will have to learn before you become successful. Beware of people who would tell you otherwise.
The best way to learn how to start day trading involves seeing the big picture.
How to Start Day Trading the Best Way Possible
What is the best news I can share with you when it comes to day trading? Well, here’s a hint. It’s probably not the news that you wanted to hear. It’s probably not the kind of advice that you have been accustomed to.
The best advice I can give you when it comes to figuring out how to start day trading is this: learn how to minimize your losses.
I know, it’s completely different from what a lot of these self-proclaimed money-making gurus tell you. They would tell you that you only need to get an account at a certain platform and you need to follow this formula.
They would even give you some charts, they would instruct you to look at the trend patterns, and then zero in when the trend starts to change. That’s when you make money according to them.
A lot of that is true. I’m not discounting that. I’m not saying that they’re liars. I’m not saying that this stuff is bunk.
What I am saying, however, is that unless you sit down and focus on just making money predictably using pattern trading, you are missing the forest from the trees.
You’re not seeing the context. If you don’t see the context, you are putting yourself in a bad financial position.
None of this is meant to give you the impression that you’re not going to make any money. In fact, a lot of people who end up losing a tremendous amount of money make a lot of money in the beginning. Seriously.
It starts out really nice, but here’s the problem: you end up developing a false sense of security. Your confidence is misplaced. It turns out that you’re just being lucky.
But once reality hits, you don’t have something to fall back on. You don’t have anything predictable. You don’t have anything, really.
And that’s when disaster strikes.
It starts out fairly small, but until and unless you pay close attention to what you’re doing and see the patterns, you may end up taking a financial bath. Believe me, it can get really nasty.
So, what is the best way to start day trading? It’s all about minimizing your losses.
Learn How to Use Limit Orders
When you are buying up or selling down, you need to limit your orders. I look at them as safety nets.
Have you seen tightrope walkers on TV? If you look at the bottom of your screen, chances are, you would see the vague outline of a safety net.
When people are walking on that tightrope, it gives them a tremendous amount of confidence and comfort knowing that if they screw up, there is a safety need beneath them.
It may not be immediately beneath them. It can be several dozen feet below them, but it’s there. You get the same sense of confidence and safety when you trade using limits.
Now, here’s the secret. If you’re just starting out with day trading, you need to set your limits fairly tight. I’m talking about 5% or, if you’re really scared, 3%.
You have to understand that when you’re day trading, you could make several trades every single day. As long as you have $25,000 or more in your account, by law, you are allowed to do several trades per day. This is how day trading works.
You will figure out quickly that one of the cardinal rules of day trading is volume. In other words, when you screw up with one trade and you lose 1% or 2%, it’s okay. Do another trade and try to reverse that, but stick to the same limits.
If you aren’t able to do that, then do another trade. And then before you know it, you start paying close attention to the patterns. This is how you eventually get on the road to predictable victory.
It’s All About the Patterns
The problem with day trading is that a lot of people think that as long as they focus on the final dollar value, they will be okay. I have no problems with that in theory.
That’s right, at the end of the day, we all want to get in with a low amount of money and walk away with a much larger amount of money. That is indisputable. There is no argument about that.
What people can argue about, however, is how to get there. This is where things get a little bit interesting.
Because you can just focus on the dollar amount and say to yourself, “I made money on that trade” or “I didn’t make money on that trade.” You might be thinking that you’re just being practical. You might be thinking that you’re just focusing on the bottom line.
Again, I have no problems with this in terms of the big picture. But if that’s the only thing that you’re focused on and you’re not really paying attention to the patterns and the volume, as well as the price behavior of the stock you’re day trading, you’re missing out on a tremendous learning opportunity.
Those data points that I mentioned and some others are the meat and potatoes of day trading. Ignore them at your peril.
If you were to ignore them, you’re basically just back to rolling the dice and hoping for the best. This is not much different from crossing your fingers and hoping that snake eyes do not appear in a game of dice.
It doesn’t make any sense. You’re day trading. You’re dealing with stocks. These don’t have to be a gamble.
While there is still a lot of uncertainty there and this can be reduced to a simple matter of luck, there are a lot of other factors that you can control or you can account for. That’s why it’s a good idea to look at patterns.
Don’t just obsess about the price. Don’t just think that this is all a matter of going in with a certain amount of money and coming out with a higher amount of money. You have to pay close attention to everything that happens in between.
This is how you separate people who eventually become successful at day trading, and those who just continue to struggle, and others who just flat out quit.
You have to take a risk in exploring and cementing your understanding of how stocks behave. This means trial and error. This means putting your money where your mouth is.
You can speculate all you want, but until and unless you put real money in your stock picks, nothing’s going to happen.
Don’t Use Real Money for as Long as Possible
Now, here’s the next shocking piece of advice I can give you. A lot of self-proclaimed experts on day trading would tell you that you need to start trading real money as soon as possible because this puts your feet on the fire.
Again, on a theoretical level, I get it. If you want to make any kind of big move in this world, there has to be some sort of emotional urgency.
I get that part. Because hey, let’s face it, there’s no shortage of people who hope and wish that their lives would change and they essentially come up with goal after goal.
But guess what? Nothing happens to them because they never ever lift a finger in making those goals happen.
There are too many of us who just daydream our lives away. We get all pumped up by the prospect of living in a mansion and driving Italian sportscars and just living the high life.
But the problem is, the emotional rush we get from daydreaming is never translated into our everyday practical reality because we never get that sense of urgency to act on our goals. I get that part.
But here’s the problem. When you’re playing with real money and you don’t know what you’re doing, it’s very easy to run out of capital. This is especially true if emotions are part of the picture.
Do you see how dangerous this is? This is why I suggest that you learn using simulated trades on the day trading platform you selected.
How do you know when to stop? Well, you know when to stop when your predictions are mostly right. That’s how you know when to say when. That’s when you start playing with real money.
So, what’s the threshold in terms of successful bets? Well, it depends on your risk tolerance. It also depends on your learning curve.
Some people are able to pick up new information very quickly. They are sharp as a whip. They can start fairly soon.
Others take a long time. Others are late starters or late bloomers.
There’s really no one right answer. What’s important is you know yourself enough so you will know when to say when.
And when you start playing with real money, don’t bolt out of the gate and hope for a million-dollar payday your first time day trading. That’s usually not going to happen. The odds are against you.
I’m not saying that it doesn’t happen at all, but the chances of it happening is actually quite remote. Instead, focus on small victories.
Believe it or not, a one percent gain when you’re first starting out is a big deal. You didn’t lose money. Better yet, you learned patterns, or at least you should have learned these patterns.
It’s like you’re getting paid to learn. And then eventually, you start scaling up your moves so you can make more money per day. And on the flip side, unfortunately, you may lose more money.
But before you do that, focus on minimizing your risk and investing the proper time and attention to the complete learning process. This is the best way to figure out how to start day trading.
Ultimately, it’s personal because different people pick up information at different rates. Click Here for the best way to start day trading.
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