If you’re in love with the fast-moving world of the stock markets, and you want to spend more time building your short-term cash and long-term wealth with your investments, then it may be time to start day trading.
Become an official day trader means that you make multiple purchases and sales within a single 24-hour period, developing a profit by paying attention to the tiny movements in the market as and when they happen.
Although this can be an exciting and profitable strategy for many investors to consider, it’s also something that shouldn’t be jumped into without the right research and strategy. Before you get started, you’ll need to make sure that you’re on the path to success, by building a successful plan.
As you may already know, one of the most important parts of any plan is understanding your goals and constraints.
Constraints and Goals to Consider Before you Begin
Before you invest both your time and your money in learning how to become a professional DT, you’ll need to think about your situation very carefully. First and foremost, ask yourself whether you actually have enough capital to get involved with this market.
You need to have at least $25,000 to get started in the US environment, and some brokers will request that you stick to $30,000 so that you always have a buffer in place.
Additionally, you’ll need to think about whether you actually have the time to dedicate several hours a day to trading.
Not only will you need to have time to watch the market and make purchases and sales when necessary, but you’ll have to find the time to learn about the market today. You should be spending several hours each day learning about what’s going on in your industry and developing your strategy accordingly.
Becoming a consistently profitable professional is something that’s going to take a lot of time. You might need to put in years of trading without making any money through a demo account. This will allow you to build a strategy that you can trust.
At the same time, you’ll need to dedicate some of your schedule to testing out brokerage systems to ensure you have one that you can rely on.
Don’t Quit Your Job Too Quickly
Although a lot of people dream of a world where they can give up their regular job and make money on the stock market instead, it’s not always as easy as it seems.
If you’re trying to quit your job, there’s a good chance that you’ll need to trade for multiple years before you get to a point where your profits will fully replace your income. Even when that happens, you’ll need to deal with the fact that there’s always a chance that you could lose money.
Don’t give up your job until you know that you have what it takes to be successful. That means having the right broker, enough time in your day, and the right amount of capital in your account.
It also means ensuring that you have a strategy that you can stick to every day to keep your risk levels as low as possible.