Almost traders (people who trade with buy/sell orders within the day) today have the desire to spend a few hours fighting on the computer screen anywhere, anytime, and then spend the whole time days left to enjoy.
What’s your advantage?
What are the reasons and advantages that make you successful? Have you ever experienced it? Is it luck, is innate, feeling or disciplined, persistent? Please note down your transactions according to the following criteria so that you can easily see your advantages and disadvantages:
Profit: On average, how much profit do you make per day?
Trading time frame: What time frame helps you to trade effectively and generate the most profit? Is that time frame at the peak of the market, or at the end of the day/session?
How many days do you trade per month? Include the days when you viewed the chart but did not get an order.
The number of transactions per month.
In the days you trade, what days do you have a specific plan?
What day do you practice according to your plan?
Were you more profitable than usual then?
Please write down these criteria and reassess your performance each month. Do this as often as possible with as many transactions and times as possible, because then you have more data to see to your advantage.
Do you have capital?
To answer this question you must answer a few more questions:
Is monthly income enough for you to live?
If you are a personal financial manager carefully, you will definitely answer this question right away.
If not, now is the time to keep an eye on it.
Day traders must be the one who knows their personal finances best. Because we never have a fixed profit, it fluctuates. Predicting spending and cash flow is essential to help us tailor our profits to long-term planning.
Based on your trading performance, calculate the volume that you will need to trade to strike a balance between your profit target and risk. Because the larger the transaction volume, the higher the risk.
Build a risk assessment model
Build your own trading review models based on your initial goals and plans.
For example, say you want $ 1000 income per month. You need to average about 3 transactions to achieve this profit. For each trade, the average risk of loss is $ 250, the sum of all three is $ 750. With a simple financial management model, the risk of loss cannot exceed 2%, which means you must have a capital of $ 37,500.
This ratio is for stock trading in the old days, today, with the unpredictable changes of the crypto market as well as derivatives, you can completely increase this rate to suit carefully. your energy, your capital, and your conditions.
Have you prepared enough to save money?
Before you start trading, think about the profit, think about the amount of debt you are, and will probably incur.
After paying off the debt you have, you need to calculate up to the amount of money enough to pay for your personal living expenses and save in a long time.
Not preparing enough savings to pay for your living expenses while you are trading, especially when losing money, will greatly affect the trading efficiency. If you feel pressured to make a monthly profit, then the more pressure is when you have to trade losing and facing dozens of bills and costs each month. More risky, unscheduled deals start to appear and you still cannot settle anything.
Are you willing to quit your current job?
For some people, work is not only a daily task but also a social life as well as an opportunity for themselves to feel they exist.
A day trader may limit his opportunities to socialize as well as receive recognition from those around him. Day trading not only gives you freedom, it also comes with isolation.
Is this what you expected?
Plan B, yes or no?
Planning for success is not enough, failure is also a part of life.
You have to plan if you fail, like a stop loss – what you do when the price line goes beyond your plan.
What is your Plan B? Can you find a job again later, or a part-time job to earn extra income for your trading?
If you fail to pass the first 2 exams yourself, do not dream about this risky and flashy job.
Step 3 will help you maximize your chances of success, while step 4 wants you to look back on the trade-offs. Step 5 – The final step will assess your stamina, with each trader taking the risk is part of the game, not just on the graph, but in your life as well.
If you have passed all 5 steps, the path for Day Trader is open to welcome!