$300-$3,000 Section - Starting out, thinking about trading and have a small account. Mental, psychological and money successes and trials.
Let's start somewhere in the middle. It's been eight months since I decided to embark upon what rational people would consider a risky way of making a living. Day trading is high-risk and very challenging. But challenges and risks never scared me. Over the past three decades, I've started, run, and sold many businesses. Some of them were profitable, some not so much.
This new venture wasn't quite a business. There would be no sales, no marketing, no advertising costs, and above all, no employees. Many say this way of making money was almost lonely as all it takes is the internet and device connected to it.
Like many, I thought this would be easy, fast money. I even had initial success and took my $2,500 account to $5,000 in less than six weeks. I was seeing my way to financial freedom on the horizon. I was mentally preparing to quit my job. I figured that I would be on my way just like those I had followed on Twitter in no time. However, that didn't last. Soon I was down to $1,000 and stressed about losing it all.
This venture has become one of the most difficult challenges I have ever faced in business. The gurus call it a business. But it's not quite a business in the strictest of sense. While there are plenty of people touting personal success and claim they are the ones to listen to because they have made it, they give mixed signals and often fake results. Therefore the ground is constantly shifting. Finding reliable advice is almost as challenging as the trade itself.
I am intent on making this work. I will be one of the 5% that succeed. The market is not very cooperative right now. I am ok with learning in tough times. When it changes, I will be ready to become one of those who can say I weathered the storm and lived to trade another day.
What I'm learning right now is what profitable traders put into practice. I'm watching how they take trades and when to enter and exit. I am learning how to read charts, recognize patterns and develop the personal discipline needed to be consistently profitable. Also, it is critical to consider one's personality and tolerance level when trading. Some like to take things slower and carry trades hours, days, and weeks. Others prefer to move fast and make a trade in minutes. Which am I? Which are you?
Some of the best advice I've seen is:
Learn to read the trade yourself. Don't rely on others' recs.
Practice with a simulator and paper money.
Don't risk more than you are comfortable losing.
Keep position size small enough not to elicit fear while trading.
Keep a trade journal and log wins and losses.
Make a set of rules and stick to them no matter what.
I'm sure there are more, but those are the ones I've gleaned or learned the hard way in my mere eight months as a day trader. Each day I practice and get closer to my goal. I'm glad you're traveling this exciting path with me.