Living Large in the Stock Market: Ways to Spend All Your Time Day Trading Without Losing All Your Money

If you want a full-time career day-trading, but you don’t want to lose your shirt, then here’s what expert traders can teach you about the fabulous world (and life) of day-trading.


Set Up A Basic Money Management Strategy

You need a basic money management strategy. Without it, you’ll lose your entire bankroll and be back on the doll working for “the man.” But seriously, you need a way to control your losses. A pure day trader buys and sells stocks and other investments and ends the trading day with cash-in-hand. There are no open positions. Which means you need to make money fast, fast, fast.

It’s not a life for everyone. But, multi-millionaire traders, like Timothy Sykes, knows it can be done. And, people who follow in the footsteps of the greats often find success. Day traders sometimes do use overnight position holds, which is called “swing trading.” Most day-traders use both approaches, depending on their particular trading style and the nature of the trade and investment.

There are times when it makes sense to hold a Monday stock into Tuesday, for example.

Day trading requires a professional software platform and high-speed internet. You do not want to be trading on a discount Internet connection plan because speed of execution counts. In fact, it can make or break your bank balance. Most traders use a prepackaged setup that’s given to them by their brokerage firm. They may also use software from a third-party company.

It’s best to use a powerful desktop computer with at least two monitors because you’ll want to see the trades in real-time and the stocks in real time too.

When you use a brokerage platform, make sure that you’re getting real-time news and data feeds, and that they are included in whatever package you purchase. Most of the time, they will come with the platform, but not always so always be sure to ask.

Finally, most traders hold back a significant portion of their savings in cash and do not trade with it. This is wise and helps you better control your losses.

Learn Technical Indicators

You need to be familiar with technical indicators and market fundamentals if you want to trade and be successful. You should at least understand the basics of technical analysis and the tools used to dissect chart patterns, trading volume, and price movements.

Some of the common indicators are resistance and support levels, moving average convergence, volatility, price oscillators, and Bollinger Bands®. Understanding how all these work is essential to your success as a trader.

Discipline And Patience

One of the most difficult habits to develop as a trader is discipline. Patience is the other. Develop a process and try it out with fictional trades. Maintain discipline in your trading style. What often happens is that traders get scared and start making irrational decisions mid-strategy, change, and end up losing money.

This is not good.

You need to maintain a strategy, even when you lose money. Accept that there will be losing trades. Seek a daily trading goal and then get out when you’ve achieved that goal. Many traders, especially new traders, mistakenly believe that they will make money every day. Sure, that’s the goal, but it never happens. Your average factors in losses — sometimes significant losses.

Stay the course, be patient, and continue to trade a winning strategy, even when you suffer temporary losses.

Alicia Houghton is a Mom who got tempted into trying day trading several years ago, since then she hasn’t looked back and is keen to help others. Her articles appear on personal finance and trading sites.