Emini Trading Blog

Posts Tagged ‘daytrading’

Perhaps due to curiosity, ambition, or even necessity you are considering day trading as a means to produce monthly cash flow. While the potential earnings, lifestyle and personal satisfaction are what appeal to most, the following three-part series focuses instead on what it really takes to start out on the right foot.
 
Part I: TIME NEEDED

This consideration of the amount of time needed to successfully day trade for a living has been divided into three areas:

1. Education
2. Daily routine
3. Business management, preceded by a word of caution.

Ironically, in a business as technical, highly leveraged and ever-changing as trading is, those pursuing it need to be reminded that there is no substitute for sound education! A string of previous trading successes, your ability to memorize stock symbols and see macro-economic scenarios will ultimately fail to sustain you in the long run.

It takes time to find, consume and absorb quality day trading education. You must learn how to gauge a market’s strength or weakness, how to ascertain entry areas with favorable probabilities, how to manage wisely your open positions and advisable. Since learning rates are subjective, how much time you need to spend each week studying the markets is up to you. Two hours, eight hours, thirteen hours? Write your answer down on a piece of paper, and do it!

“A good trader is a lifetime student of the markets.”

A day trader’s daily routine revolves around market hours. Thanks to streamlined exchanges and access to currency trading, the number of available markets is now unprecedented. Therefore, active trading occurs practically around the clock! Follow a consistent routine to build good habits. Write down your trade routine, step-by-step, so you don’t miss anything.

Managing your day trading business starts with comparing your goals for the day with your performance. If the trade-platform you use records your trades (like TIVO does for TV), you can re-play your good and bad trades and learn from them. Repeating our good moves and not repeating our mistakes is a must, so take the time to note these in a trade diary. Before closing out your trade review, be sure pertinent trade-metrics have been logged. To give this effort it’s proper due, figure one to two hours.

Join us next time for part two of the series, as we examine the skills needed to day trade for a living.