What does it mean to be a day trader?
So what does it take to be a day trader?
I began supporting and teaching traders in the 90’s, and back then everyone wanted to day trade futures.
Today, nothing has changed as the majority still want me to teach them to be a day trader.
I find that interesting, as I know with 100 per cent certainty that none of these people can tell me what a day trader does.
When I ask them what they want to achieve I get answers like I want to make some extra income or I would like to replace my income.
But what has that got to do with day trading?
Well nothing really.
It is all good and well to want to supplement or replace your income, which is all possible with the right education.
However, it’s pretty silly to label yourself as a certain type of trader before you even understand what trading is.
A well-known statistic is that 90 per cent of traders are unsuccessful.
But would it surprise you to know that for day traders I believe it would be well over 95 per cent; in fact, my guess is that less than 1 per cent of day traders are consistently profitable.
So before you say you are a day trader, ask yourself if you know what day trading actually is and what it takes to be one.
People who desire to supplement or replace their income from trading, start by Googling for trading information and education.
This leads them to find fancy websites with images of expensive houses, boats, and cars - websites with the “make quick money from very little capital” message.
You know the type, they show you examples of chart of successful trades making things look quick, easy and very profitable.
Right now, we are seeing charts of bitcoin going from a few dollars to well over $10,000 in a matter of months, and there are thousands of websites on the bandwagon telling everyone they can teach them to be rich in bitcoin or Forex trading.
According to these websites, all you need to do to be successful is to find out how to do it the right way and then take massive action.
But if 90 per cent of traders are not successful, logic dictates that you look at what the majority are doing and don’t do it, so you stand a chance of being successful yourself.
In short, look at what the 90 per cent of websites are promoting and don’t do it.
So what do you need to be successful?
You need a solid trading plan./p>
The 90 per cent who fail, do so because they fail to plan or should I say they don’t have a solid tested trading plan at all.
To be successful you also need to be committed, and that means having the right attitude.
In my experience, those who fail do so because they fail to commit the time and money to developing the right knowledge and skills.
There is an old saying that goes like this: What a wise man does in the beginning a fool does in the end.
Every week I have conversations with traders who want us to teach them because they failed to consider the above two points.
In every case, these traders are inconsistent in their trading.
When I ask them about their trading process, where they have learnt, what rules they use and many other questions, I find that they have followed the path of the 90 per cent.
Being different means you will have what it takes to be a great trader and be part of the 10 per cent.
So let me ask you, are you doing what the 90 per cent are doing or are you different?
So what do we expect in the market?
Last week the Australian market traded to 5,958 points and after a brief fall managed to stay at around 5,930 points, following a positive lead from Wall Street.
While the rise locally is a positive sign, investors should be cautious as this is the first week up from the bottom of the recent decline to the low at 5,834 points.
It is quite normal for the market to rise briefly, as sellers take a break from forcing prices lower prior to the final move down.
Right now is the time to be patient.
Looking ahead, markets will be assessing what is likely to unfold in the next US reporting season, but the more significant influence will be the Australian Federal Budget.
Scrutiny of the budget by the big fund managers in May can create volatility in our market.
However, if the budget is received positively, the market will instead rise rapidly.
Economic data coming out about Australia has been positive, despite negative commentary.
So let’s get into the charts.
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