I just wanted to wish everyone a happy new year and the best of success in 2015. As you will always here me say, day trading is a very small club when it comes to success, but not for the reasons that most people think. Most think it can not be done and that only a select few who “know how it is rigged” actually make any money as a day trader. I used to feel that way as well, but I stuck with it and finally learned the language of the chart and how to understand what prices are doing. If you can get to that point, you can do this, so here is to great day trades in 2015!
What most new traders, and even many old time traders, fail to realize is that the way you get better at day trading is through hard work, and I do not mean by trading all day every day and getting beat up and losing all of your trading capital. That will not make you a better trader in any way in my humble opinion. That will only separate you from your hard earned money and lead you to give up long before you have even begin to get a real understanding of what the markets are doing when prices are bouncing up and down on a chart.
The way you get better at this is through simulated trading, without using your real trading capital, and then studying your trades and your chart at the end of the day. Studying them diligently, trying to learn or understand why a trade worked or why it did not work. There are reasons you were wrong, and normally you just read the chart wrong, but often you may have just been tricked, because that is what the markets movers try and do. They try and trick you into entering in the wrong direction, and then reversing prices quickly. These are some of the best trading opportunities though, and we call them traps, because that is what they consist of mainly. Trapped traders that have to exit when they realize that they were wrong, and all of the exiting traders push the market quickly when their exit orders all start getting executed.
Simulated trading with NinjaTrader has come a long way form the old days. It works exactly like the live market does, so it is not a bit different than live trading now. Other than the fact that you are not trading with real capital, it is exactly the same since you are trading live data and the orders all work exactly the same as when they are live. Other than that fact that you are trading with monopoly money, it is the very same thing as live trading, so if you can eventually be successful on the simulator, there is no reason you can not be successful trading live. If you can trade on the simulator successfully, you just have to train your mind to do the very same things trading live and you can be a successful day trader.
No, it is not easy to do. As I stated, it takes hard work and a lot of invested time. This business pays better than being a doctor or a lawyer in most cases, so do not expect that you can just walk in and start making money. It takes years to become successful as a doctor or a lawyer and learning to day trade is no different. It usually takes years of hard work and study, so be prepared for that. There are no short cuts, no holy grails, and the markets are not rigged either. What happens is what the markets do, and that is prices move around. That is all we need to make money, is movement and the ability to understand what prices are doing and where they are likely headed in the short term.
If you learn to understand price movements and what the chart is telling you, then you can learn to predict, with a very high probability, where prices are going, at least in the short term. That ability can make you very successful financially, but do not expect it to come quickly or easily. You must be dedicated and you must pay your dues in time, frustrations and simply staying focused and not giving up or rushing to trade live with your real funds. Day trading is not a get rich quick program. If you approach it like most with aspirations of getting rich quickly, I guarantee that you will fail.
Approach this like a job and a career, and plan to get your education first, which is like getting any other professional education. It will take time, hard work, dedication and a great deal of experience! If you approach this profession in this manner, your odds of success will improve tremendously. Most importantly, you will at least save yourself some money by understanding how greatly the odds are stacked against you if you don’t understand what is going on and what you are truly up against.
Trading without knowledge and experience is like stepping into the batter’s box against the best major league pitchers today and expecting to be successful. Understand, you might get lucky and get the bat on the ball occasionally, but you will not be successful long term. No, you will have to practice and work hard to improve your skills! Most of us would never even touch the ball, not even in 100 swings, this I can guarantee you. Trading works the same way. It is not easy and it is not something you can do without knowledge of the game and experience playing it. Actually, a “lot” of experience playing it. Why do you think most major league players go through the minors first? Because they need experience playing with the best players and they need to practice and hone their skills! They also need coaching, because if you are practicing the wrong things, you are just wasting your time, and most new traders are doing just that, practicing the wrong things and in the wrong way!
If you read what we share on this website, you will at least be getting the proper coaching, so then it is only up to you to put in the hard work studying, practicing and honing your skills the way we coach them to be done. You have the proper coaching and information right here in front of you, so only you control your destiny from here.
If you need to do so, read this post a few times over until it makes sense, because you will not hear this message in most trading circles. Most will lead you to believe that the markets have a great secret, and that they have that secret and will sell it to you for a large amount of money. Do not believe it, because it is not true and there is no holy grail or secret sauce that anyone can give or sell you that will suddenly make you successful as a day trader. You simply need to get started learning the proper information and then plan to spend a great deal of time studying your charts every single day, and sim trading as much as possible and as often as possible. Most importantly, study your charts at the end of each day diligently. Do not put them down until you understand everything you did right, and everything you did wrong that day.
If you approach this with that process and plan to do it for a very long time without giving up and without jumping in live with your real funds too soon, you might just be one of the 5% to 10% of traders that actually make it in this business!
Happy New Year and great day trades in 2015 to all of you!