According to Investopedia, day trading is defined as “the buying and selling of a security within a single trading day,” this pattern of trading is widely known in the Forex and stock market. A day trader often opens and closes a position in the same particular trading day and profit from arbitrage opportunities. It can be a lucrative yet challenging career at the same time.
Many may have the perception of day trading like it is a get-rich-quick scheme or day trading can make them a millionaire by just trading for a few hours in a day. The internet has given a disillusion on how easy it is to be a day trader and day trading requires almost zero effort to make big checks.
But is it so?
The answer is no. Day trading might seem easy from the outside, but it takes relentless practice and study to become a legitimate and profit earning day trader. There are a few key qualities trader should have to become a professional or successful day trader:
Capital for day trading
The risk that day trader has to face in trading is usually higher than normal trader who leaves their position overnight. Risk capital which they can afford to lose is required for them in case of emergency. This acts as the final line of their trading and also protects them from having a major financial breakdown because of their emotions.
Discipline plays a pivotal role, no matter what kind of trading you are into but if we have to pick out one kind of trading that needs the utmost discipline, it surely will be day trading. Success in day trading without a disciplined mindset is practically impossible and suicidal. Being discipline can prevent day traders from becoming a high stakes gambler.
Trading experience & market knowledge
Let’s be frank, traders who benefit from day trading are usually experienced and professional as it requires a swift response on current financial events and the price movement of currencies. Amateur traders are not recommended to enter the Forex market as a day trader, it can knock down their Forex trading endeavor before they even started to settle in.
It is important to remember that day trading is not easy, but by working hard and with adequate luck, it can be a lucrative career for Forex traders. Day traders have to ensure that they have enough trading capital in order to take advantage of the relatively small price movement in the Forex market.
If you are convinced that you are suitable for day trading, always try trading demo first. Trade with virtual money and find a strategy that fits your trading style and goal. Develop your own trading strategy by knowing when to get in and out of a position and try the same strategy for at least a month on the demo account. Calculate your loss and gain, this can help you to analyze and improve your trading better.
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