Become a Day Trader – 9 Necessary Qualities to become a trader – I spent 4 months day trading crude oil – here’s what I learned:
Is it possible to become a day trader?
Furthermore, is it possible to day trade your way to financial independence?
Trading can be flexible way to earn extra money, but it requires time, risk tolerance, and it takes effort to build knowledge and cultivate the skill.
I initially began paper trading around August 2015 and have since then placed over 200 trades between both a practice and real Margin account.
In this short period of time, I’ve noticed key elements that are necessary to make it as a successful trader.
But just like the 9 to 5, day trading is not exempt from its own share of trade-offs.
It’s challenging and stressful at times. There can be great periods of success followed by times of continuous losses.
That’s why there are certain elements that will help make it as a trader.
Become a Day Trader – 9 Qualities of a Prosperous Day Trader
There are no secrets to success. It is the result of preparation, hard work, and learning from failure. – Colin Powell
1. Discipline
Are you disciplined enough to wake up before the markets open, and more importantly, can you stick to a plan? Each day before the market opens, I’ve already determined which equity will be traded, how many shares, what stop limit, and profit potential. It can become tedious writing down the same details every morning, but it’s essential to success. Being prepared makes those split second decisions that much easier.
2. Detail-Orientated
Trading isn’t always like what Wall Street makes it out to be. There’s less exhilarating, behind the scenes work that still needs to be done. I think a lot of traders fail due to lack of careful preparation and documenting. There are tasks such as taxes, documenting, capital management, spreadsheets, and planning. It’s not all about locking in quick profits and having fun. Luckily for me, I actually enjoy doing some of the more dull tasks. I like spreadsheets, a lot. The key area where detail is required is when it comes to money management. You need to have the foresight to put money aside for taxes while still managing to cover the cost of bills.
3. Focussed
There are times when a laser like focus is required during trading. One example is once an order to buy is filled. Just seconds after the buy order is executed, the stop limit order is entered. If you get distracted by the candlesticks or something other than entering that order correctly, then you might be about to lose money. On top of that, you must know how much the equity needs to rise in value to make a profit. And you have to be able to react.
4. Pattern-Seeking
Are you someone who is constantly looking for patterns in life? There are patterns in everything from the types of people you meet to stock charts. If you’re a natural pattern seeker, you may have an advantage here. It might be much easier for you to develop your own style of trading based on what you see. Where as others might struggle to consistently find entry points and be too concerned with what other traders would do instead of developing their own style.
5. Progressive
Ever since I was young, I’ve enjoyed building towards long term goals. Trading is progressive and it’s about being able to adapt. It’s literally the same progressive nature that got me into playing video games like Sim City or franchise mode in NBA 2K
6. Business-Like
A lot of people tend to approach trading more like they’re going to the casino instead of treating it like a business. It needs to be taken seriously. A proper business plan as well as day to day plan needs to be in place.
Related Post: View Yourself as a Business to Save Money
One of the funny things about the stock market is
that every time one person buys, another sells,
and both think they are astute. – William A. Feather
7. Competitive
The financial industry is a competitive animal, like it or not. If you’re a trader, you are literally competing every single day. Someone is either going to take your money or you’re gonna take theirs. I think it’s why so many people in the financial world are sports fanatics as well. And is it just me or do stocks and basketball go hand in hand? It seems as though most people in the investing community are basketball fans?
8. Appetite For Risk
I have a friend that use to encourage me to take more risk when I was just a straight dividend investor. And you know what? He was right. Traders, like entrepreneurs, need to be comfortable with taking risk. If you can’t cope with uncertainty then it may not be for you.
9. Patient
A lot of your day can be just sitting around waiting for the right set-up. And to be frank, it can get boring. When there isn’t an opportunity to trade, I’m often tempted to check ESPN or start writing a blog post. But you have to stay focussed! An opportunity can come out of no where and you might miss out on your profit for the day.
Question: What else makes a great trader?
I am not a licensed investment or tax adviser. All opinions are my own. This post contains advertisements by Google Adsense. This post also contains internal links, affiliate links, links to external sites, and links to RTC social media accounts.
Earn passive income through dividend investing with RTC’s link below ($50 in free trades):
Connect with RTC
Twitter: @Reversethecrush
Pinterest: @reversethecrushblog
Instagram: @reversethecrush_
Facebook: @reversethecrushblog
Email: graham@reversethecrush.com
Quitting The 9 to 5: 6 Reasons Why Quitting Was Not That Risky
