Oh, what joy it is when your hard work finally starts to pay off. Not only did I have one of my more successful days of trading in 2020, I did it (for the most part) with a smile on my face because I felt that I understood what I was doing. Through the ups and downs, this morning has allowed me to be more sure that what I am pursuing is obtainable and I can be a profitable day trader in 2020.
I want to warn you that I did make some mistakes today.
Not all of my trades were profitable, but I was able to learn quickly, adjust the mindset that I had in order to dig myself out of a hole. I was able to do this by enforcing some of my best practices that I have learned through day trading in 2019, and utilizing that today.
So here’s the story:
I started the day off about $40 in the red, I took a bad position on UGAZ and I didn’t average into my position well. This occurred mainly because I could not identify the overall direction that the ETF was moving well because the market had just opened and I was too eager to jump in.
I will do less technical analysis in this post and talk more about what made me successful in the end.
As you can see from the screenshot below, I was able to overcome that $40 deficit and (in one trade) bring my account back green for the day with a $55 trade.
How I did this?
By focusing on direction.
Direction is your best friend when trading.
As a trader, you are so small in comparison to the overall market.
Your money is child’s play compared to all that is going on, and the best way to benefit from that is to ride the flow of what is already occurring.
Don’t row against the flow and don’t trade against the pattern.
In order to do this, you must first know how to identify the direction in the first place. Is it up trending, down trending, horizontal? How will you react when you are in the red for a little while? Will you be greedy and not lock in profits soon enough?
These are the questions that you must ask yourself to prepare yourself emotionally when taking a trade.
This leads me to my second point:
Shortly after that trade, I got overly excited and took a premature position once again. I saw a potential break of pattern (of a trend that was not in my favor) and decided to take a rather large stake.
This position knocked me right back down to a $50 deficit for the day.
I could have given up at this time, but I decided to give it one more try and focus on direction and try to take advantage of opportunities as they presented themselves.
This allowed me to take another trade (that is pictured below) and finish the day as $27 profit, instead of in the red.
While this may not seem like a lot of money to you, to me it feels like the start of something great.
I am finally understanding how to make money in the market, and that will lead me to making actual money that I can use to fuel other investment opportunities.
- The trend is your friend with trading and focusing on direction is the best way to allow you to grow your account
- Make sure you understand the market that you are investing in, if you don’t know anything about day trading, do some research!! (or stay tuned for the day trading online course that I will be releasing in June 2020)
- Don’t let your emotions get the best of you, try to trade objectively in order to make sure that you aren’t hoping that the market performs a certain way
I hope that I have provided value to you as a trader in order to help make your next trade profitable!
Thanks for reading!
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Have a great day!