So you’re interested in day trading but your current activities take up most of your time. Can you still do it or is it unrealistic? Well, let’s find out!
Before you get into any market and start buying or selling assets, you need to figure out the current conditions in order to know your optimal buying and selling targets. This is when you take a look at your favourite indicators and see if there are any opportunities to get in or not. Obivously, if you’re not familiar with these tools, you also need to learn about them first. This is crucial as we believe that 80% of your trading decisions should be based on technical analysis. Fortunately, we have a full lesson on this matter here to help you out so we strongly recommend you to check it out. Take the time that’s required for you to understand how these indicators work and practice on a demo account as well. As you can see, this already takes quite some time and we’re not even done yet. Asset prices are also influenced by the latest news and developments in related industries. Therefore you need to be well informed about them as prices can move suddenly after a company has released its latest data for instance. If the results are a lot worst than expected, a sell off might occur and prices could go down quickly even though there were no signs of such moves on the charts and on your indicators. The preparation time before any trading session is tedious but very important in order to have a clear view of the current market conditions, anticipate the next prive move, minimize your risks and of course make profits.
If you want to be a day trader, as the term suggests, you need to be in front of the computer everyday trading stocks, commodities, options or currencies. Not only you need your preparation time before the actual trading session, you also need to make a significant amount of trades in order to generate a significant revenue. This is where it’s crucial to have a trading plan in mind to know exaclty how many trades a day to want to make, what should be your success rate, your profit targets and your stop loss orders. Depending on your means and your goals, you should be performing at least 5 to 10 trades a day to make some decent profits. Now, there are not always opportunities available within your strategy so sometimes you need to be patient. If you’re trading in the Forex market, chances are you will find some sooner than in the stock market for instance as the market is open 24 hours a day and volatility is higher. A day trader typically spends a few hours a day trading and stops after he has performed the amount of trades he wanted to make.
If you think it’s time to have a drink after that, think again. Even though you don’t necessarily need to do it right after your trading session, analyzing your trades is critical in order to see if you’re on target with your goals and how you can improve your performance. Take the time to look at where you made significant profits and losses and understand why that happened and which indicator you used to based your decisions on. Doing so on a regular basis will make sure that you become better and better, grasp all the subtleties of the market and are able to take better decisions more often. At this point, you probably guessed that this takes quite some time as well.
The bottom line is that day trading is time consuming indeed and would be nearly impossible to combine with several other activities. If you earn residual income and are not that busy, perhaps it’s something for you. For all the others, swing trading or long-term investing is definitely more suitable.