Become A Day Trader - 3 Simple Steps To Consistent Profits
Topics: how, to, become, a, day, trader, advice, today, stocks, stock, market, invest, investing, online, Forex, currencies
To become a day trader and to be consistently profitable, there are 3 simple steps you must follow unless you want to lose a lot of money getting there.
You want to become a day trader and make consistent profits. You also want to reliably repeat when you hit winners, right? Of course you do! The first goal in trading is profiting. Goal #2 is then making money consistently. Goal #3 is steadily increasing profits.
Your trading profits are primarily controlled by what YOU do, more so than what the markets do. There are traders profiting every single day, so pointing your finger at the markets is simply an excuse. If you want consistent profits, then get more consistent in what you do in your trading.
How to become a day trader begins with understanding that trading is a repeated activity. That’s why making use of a proven trading system is so important. If you truly desire to make improvements in a process, and particularly when your goal is achieve greater consistency, the three steps below are ones you can take to dramatically improve your consistency.
Step 1. Clearly detail and document your system. One of the more common mistakes made by traders, particularly regarding consistency, is that they don’t have their system well-defined and written down.
When you have an activity that isn’t documented, there will probably be inconsistencies in how the task gets performed. The reason the military is so big on following procedure: they insist that things be done in a uniform, reliable and predictable manner. The same thing goes for your trading.
Step 2. Measure your trading system’s critical factors. A wise man once stated that for you to improve anything, you must begin by first measuring it. In what other way are you to know if you’re making progress? With trading you have several measurable aspects that determine your bottom line, in addition to the all-important profit/loss number at the end of the month.
Businesses in all industries have certain aspects that directly affect the profitability of the business. Savvy business owners know to track those aspects and assign measureables to them. The reason that these are so important as you become a day trader is because through a calculated analysis of these factors, you can then see specifically where to focus your efforts to make specific improvements.
Step 3. Make improvements in a controlled manner. Once you’ve conducted an analysis of your system, you can now focus on specific facets of your system to make improvements. By having a method for this analysis, you can make changes to the system and test - without risking money - either through back-testing or in a demo account and determine the true impact on the system’s performance - and if there are any trade-offs.
As an example, let’s say you analyze your system and find that your winning percentage is currently 48%. You’ve got an idea on how to improve it to 55%, which you “think” would increase your overall returns. Next would be to run the analysis on the system with the change on real market data. By looking at the results, you can see if this change indeed did what you expected, but also if there were trade-offs in other aspects of your system performance, such as a reduced number of trading opportunities. It will be clear now whether you should stick with your current system or go with the modification.
Conclusion. Trading is a process from which you want consistent - and reliable - results. Trading your system is an activity that you do regularly, so if you want want to become a day trader that makes consistent profits, focus on making your actions consistent.
Step 1 is to make sure that you have clearly defined and written down your system. By clarifying your system and then documenting it, you are more likely to repeat what you do consistently.
Step 2 is to run the metrics on your trading for a baseline of where you are now versus your desired goal where you want to be. This also let’s you see where to focus for improvement.
Step 3 is to track your metrics and make improvements in a meticulous manner and keeping your risk very controlled.
There are a handful of metrics regarding your trading system that have substantial impact on your profits as you become a day trader. Through analyzing your system’s performance and paying particular attention to these metrics, you give yourself the best means to increase your profits. Additionally, this will provide a major boost to your ability to consistently produce profits.
Not sure what metrics you need to become a day trader that profits consistently? Don’t know how to calculate them? Don’t throw away $500 on analysis software. Discover the easy way to get your metrics by clicking here,
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