Welcome to a brand new trading week. I am very excited on this Monday morning because I was able to wake up and make a little over $80 sitting in my pajamas with all of it coming directly from my computer.
This is also the start of my second month day trading, and I am learning more and more everyday on how to become a successful day trader. The tips that I learn today combined with those in the past has helped me be more consistent with being green.
Below is a snapshot of my day’s profits:
$84.18 profit (1.68% gain)
How did I do it?
I will give you the three keys that helped me be successful day trading today. In the hopes that you can use some of these same tips to benefit your trading career in the future.
Key #1: Identifying Direction
On the stock chart above, I was able to identify that DGAZ had an overall up trending pattern.
This meant that previously it had continued to make higher highs and higher lows, and because I was able to recognize this pattern, it allowed me to ride the flow and profit.
It is important to remember that patterns tend to repeat themselves, but they don’t have to.
That is why it is vital to have a position size that you are comfortable with and that you aren’t too emotional with when trading.
Having the knowledge to identify overall support and resistance levels also goes a long way when stock trading. This because of this common rule:
Old Supports = New Resistances
Old Resistances = New Supports
and vice versa..
This means that the price tends to bounce at levels that it has bounced before.
Did I lose you?
If you have any questions, send me a message on Facebook at http://www.facebook.com/centennialinvestor
Key #2: Don’t Trade Based on Someone Else’s Opinion
I was doing great for the hour that I was trading. However, about 10 minutes into trading, I decided to hop onto a live stream of one of my buddies that was trading at the time as well.
He entered into a position that I didn’t see much value in, and I let it influence my decision of staying out until a better opportunity presented itself.
This caused me to make my only red trade of the day, losing about $15 on that position.
Although, I was able to come back from that loss and surpass my daily goal of $50, it provides me with an important lesson moving forward.
This also segways into my third key for today, which is:
Key #3: Manage that Risk!
Managing risk is probably the single most important thing you can do as a beginner day trader.
This can be the difference between a long and fulfilling trading career, and one that never quite gets off the ground because of the large losses that you take early on.
When you are first starting out, the main thing that you should have a focus on is learning how to trade. Not making money.
When you focus on making money, you tend to be more emotional when trading and that causes you to make mistakes because you are hoping that the market swings a certain way.
You have to always understand that you are small in comparison to the overall market, and your best bet to be successful is to ride the ongoing wave and know when to lock in profits or cut losses.
Thanks for reading!
Make sure to find us on Facebook, Twitter, and Instagram @centennialinvestor for more content!
or, subscribe to this blog at http://www.centennialinvestor.com
Have a great day!