Did you know a professional trader is not someone who trades more, has a better computer, or knows how to analyze “dangerous” indicators. A professional Trader is a person who is strong in psychology and knows how to manage trades scientifically.
If you’re new to trading and especially likely to become a real day trader, you’ve probably wondered how much money you’ll be able to make from this job.
In the following article, Ola City wishes to share with you the steps of becoming a Day Trader and how to actively make money!
I. What is a day trader?
Day Trader is the use of a short-term trading strategy, opening and closing orders on the same day, with the goal of finding profit in the short term. This means that traders usually open positions during the day and close their positions every evening, holding no positions overnight.
This trading technique will be suitable for traders who possess a full range of assertive, disciplined and diligent conditions. Converging those factors can be likely to become a successful day trader. Day traders will usually open multiple orders in a day, depending heavily on technical analysis indicators and the activity of the price line.
II. How much money can day traders make?
Back to today’s theme is how much money will day traders make from this job? The answer is that it depends on many factors. There are traders who make hundreds of dollars a day, thousands of dollars a day, and some who make profits of up to 5, 6 and even 7 figures a day.
Perhaps having been irritated by the huge level of profits some people make from this job, someone will ask themselves: “Am I making that much money? Maybe I’ll quit my job right away and become a day trader.”
However, money is not easy to make and all you need to do is read all that you share to determine in advance the profit that Day Trader can achieve each day. Each person will have a different starting point and the level of profit will also be different accordingly.
So what factors can determine how much profit you make as a day trader?
There are four main factors that affect your earnings:
- What market are you operating in?
- How much money do you start trading with?
- How much time do you spend learning how to trade effectively?
- Risk-taking psychology
III. Top 10 golden rules in trading that traders need to know
Many people wonder, “How can I form my own set of principles?” The answer lies in your own trading process. Trading practice will cause you to stumble, help you gain experience, from which your trading principles are formed. And in the course of trading you reconcile that principle with your trading method. This set of principles will change over time, but the important basics must remain.
Here are 10 golden rules in trading for traders:
- Always wait for the qualifying convergence of a nice trading setup: The rule here is “No Setup – No Trading.”
- Truly quality trading strategies will usually work immediately.
- Never easily accept a large loss for a trading strategy. When you feel something is wrong in your strategy, don’t hesitate to exit the order.
- Always improve and improve your trading skills. Traders who have succeeded and they are constantly learning, why don’t you, right?
- Learn to be patient with profitable trading strategies. And become more assertive with loss-making strategies. This is one of the factors that help you both earn a large profit in the market, while helping you train your patience.
- Discipline is the key to success and long-term survival in trading.
- Don’t let your emotions show up whether your strategy is profitable or losing. Emotions in any case affect the trader’s trading results.
- Always trade with volume that makes your psyche comfortable. To be more precise, trading volume leaves your emotions with no chance of resurfacing. (Trading according to your emotions is the fastest way to get you kicked out of the market.)
- Keep things simple and don’t think too much, don’t complicate your trading strategy. Simple from the mind to how to analyze and trade.
- Always humble. This is not only a very should-have attitude in the profession, but it will help traders not to be subjective in trading but also to maintain a stable mentality.
IV. Steps to becoming a daily trader
Because daily trading means that you want to go in and out of orders during the day, generate income every day, so it is common to use greater leverage than holding orders for long periods of time. A day-to-day trader is similar to owning a company that has many stages of work, each of which has a clear division, and the person who does those jobs is the only one you have.
1. Self-assessment of the market
Crypto is growing at a rapid pace, and your appreciation of the market isn’t simply a job that can be about 3-5 days behind schedule. Slowly, you have a few deadlines waiting.
Every day you need:
- Constantly updated, constantly because crypto runs 24/7 and the amount of information is too much, the pressure will not be small.
- Learn your own knowledge without guidance or requests from someone.
- In addition, you need to further assess your risk tolerance to how long you can maintain this job or how long you will give up before you succeed.
- Market assessment needs to take place every day, that’s the trader’s job. If you can’t assess the market, stop the idea of quitting your job and becoming a daily trader.
2. Preparing capital
No one can make continuous profits, intermittent losses and irregularities during the trade process are part of the daily work each trader faces.
For example, you lose 2 orders in a row but by the third order you can recover the lost number.
To handle this risk, you need to have enough capital, at least every day. Entering the market with small amounts of money and not being spent reasonably will surely fail. And most importantly, with $1,000 in capital, you plan to trade for 10 days and $100 per day. You can’t spend $100 on a trade, at least five or more orders.
3. Understand how the market works
Every daily trader needs a solid knowledge base of how the markets work. From simple details such as the closing time of the candle in the H1, H4, Daily time frame,… to more complex details about news, professional trading tools…
4. Understanding the entire financial economy
You may think that trading crypto is not related to stocks, gold, forex, politics,… But in fact, in the economic chain, crypto is greatly affected by major financial markets. Of course not directly, but it will help you to assess the market more accurately and accurately.
5. Check your trading strategy
Surely you have prepared yourself a few trading strategies and you need to choose the 1-2 most effective strategies to trade on a daily basis. Of course, you shouldn’t have only one strategy because assuming they fail, you still have a backup plan to change, gain experience, and build a better strategy later on.
In addition, the market will always change, you need to constantly update them so that it does not get outdated and ensure efficiency.
6. Plan your strategy every day
Choosing only strategies is not enough, consider the following to ensure success:
- How is the strategy used?
- How much capital will be used for each day, each order?
- How often is the day’s transaction?
7. Do a demo test
You should make all plans on the demo first, then start to test transactions for a small amount of money. This ensures your plan is moving in the right direction.
8. Conducting transactions
After careful preparation, proceed to the transaction, surely in the process there will be many problems arising. Now let’s review whether the steps you have prepared are correct, enough or not, what additional needs to be added for them to be completed,…
Cryptocurrencies are markets with many opportunities and are also full of risks. Not only that, in crypto you can use leverage when trading, even x125 leverage for every trade you make. This means that the losses you incur will also be much higher.
Each market uses different amounts of capital, so don’t think that one market is better than another based solely on the dollar’s profitability. Leverage trading will fall in the middle. All are great and profitable markets if you find the most suitable strategy to optimize the most profitable levels. Trading is definitely going to win and lose, but to be profitable, you have to be a little bigger than the losing trades.
In short, maintain discipline, keep your winnings slightly larger than your losses, and try to win more than 50% of your trades every day. Achieving this means that you can join the small ranks of successful traders. I hope you win on your way to becoming a real day trader!
Ola City Global