Are you thinking about learning to day trade and asking yourself the question: “Is day trading right for you?” If so, you are not alone, and we are asked for advice every day about day trading here at Price Action Trading Systems, so when we ran across this article by James Okada Lee, we thought it was worth sharing with our readers, as it gives a good idea as to some of the pros and cons of day trading.
Regardless of what you decide, if you do determine that day trading is something that you would like to learn and use to earn a living, then we also want you to know that the only way to truly make money as a day trader is to learn to read a price chart, which is also known as price action trading. Forget all of the fancy indicators and slick sales pitches and concentrate on learning to read a price chart and you will be on the right track and ahead of the majority of new day traders in no time. Here is what James had to say in his article that we found at www.ezineArticles.com:
Many new market participants are lured in by the glamor of day trading. We hear of great stories of day traders making a sizable income, working only a few hours a day, and playing golf every weekend. With the fancy advertisements of brokers and data vendors, it is easy to get sucked in without really understanding what day trading is all about.
You may have had some experience investing in the stock market. Now you want to consider trading. Index futures, forex, and tech stocks are among the favorites with day traders. Do you really know what it takes to be a full-time trader?
Most people are tired of their current jobs and looking to find financial independence. Why do you think “Rich Dad, Poor Dad” made millions?
Here are the perks associated with day trading:
* Independence: There are no obligation to anybody but yourself. You do not have to deal with customers, clients, or even your boss. You pick your own working hours and wake up whenever you feel like it. Time is very flexible.
* Financial Independence: If you are considered a profitable trader, you are most likely not concerned about paying rent the next month. True, traders do go bust. But once you learn how to trade you can make money almost anytime you want.
* Mobility: You are able to work from anywhere in the world as long as you have a computer with an internet connection. You can place orders on the phone as well but I do not recommend it when day trading. Alot can happen in a matter of seconds.
Some things to consider
Like any other job, there are certain things you may have trouble facing. Do you like to work in an environment full of people? Then day trading may not be for you. Many day traders work from their home and are faced with isolation. There are trading rooms and facilities that you can go to but this is limited on where you live. Day traders also spend a considerable amount of time staring at their computers. You may actually sit there for 3 hours before you make one trade that lasts 15 minutes. It is similar to going to a Mike Tyson fight. Waiting for 2 hours and watching for 15 seconds.
Day trading may not be for you. It requires quick fingers and an aggressive personality. If you like to spend time analyzing before making a decision you might want to consider swing or position trading. Market analysis must be done prior to the opening. Hesitation in day trading can be costly.
My Daily Routine
Take a quick glance at my daily routine and if it suits you day trading may be right for you. I wake up approximately 1-2 hours before the opening to go over my charts. I spend this time to analyze and devise a trading plan. I will never trade the markets blindly. Having a plan is a must. From 9:30am eastern to 11:00am eastern, I have my eyes glued to the markets and my computer. I am looking for 1-3 good setups. From 11:15am to 2:00pm eastern I will usually spend time doing some work on my website, writing articles, planning new business’, and grabbing some food. From 2:00pm to 5:00pm eastern, I am back to trading looking for any good afternoon opportunities. The markets close at 5:00pm and I spend another 2-3 hours studying my trades, analyzing market action, and trying to learn anything new. I will never sleep without learning at least one new thing each day.
I tend to be a night owl and a workaholic so I spend most of the time after the close working on different projects. My only break is on every Friday or Saturday night when I do go out and party hard. Sunday… I am back at the laboratory. In my case a 9-5 job offers less working hours. I tend to work over 12 hours everyday.
This may not sound appealing to some people. But the biggest reason why I love what I do is that I have complete independence. I can choose to do whatever I want to do. Also day trading offers a tremendous feeling of achievement. Everyday is rewarding and you make money based on your results. There is no harsher judge than the markets. If you are trading with a hangover the markets will rip your throat out. If you are prepared with the right mindset, the markets will reward you. You can read the entire original article here.
James Lee is a full-time day trader specializing in the mini-sized Dow futures. His core trading strategy is based on pivot point clusters and Market Profile. You can learn more about his trading methodology at http://www.traderslaboratory.com
One you learn to read a price chart properly and one you can consistently make money as a day trader, then the life of a trader can be very rewarding. It’s not easy getting there, and while it may seem glamorous to sit in front of a computer screen and make money it is anything but in the end. The life of a trader can be very lonely and very boring once the thrill of the trade is past, which must come before you will be profitable. If your heart still thumps and you still feel that surge of adrenalin when you enter a new trade, then you have a ways to go to become consistently profitable.
I know this for a fact, as once you actually learn to make money on a daily basis, it will become very dry and very boring and it will no longer give you that quick rush of adrenalin that many are really seeking when they day trade. In closing, learn to read a price chart and learn to leave your emotions at the door and you will then be on your way to finding out the answer to the question…… is day trading it right for you.
Article Source: James_Okada_Lee