As a result many traders who may have had a good chance of ultimately becoming profitable don’t realize their full potential because they didn’t put together a plan on how to start.
One thing I will say and this goes for both swing traders and day traders and I mentioned it before in an earlier article, you cannot learn how to trade without actually going through the process with real money.
Paper trading will not prepare you for the emotions of trading.
Nothing other than having REAL money on the line will prepare you. The key is to start really small and work your way up from there.
Learn How to Swing Trade First
Here is what I believe is the best way to get your feet wet:
If you are really interested in learning how to day trade, I will tell you that before you become a profitable day trader you must learn to become a great swing trader.
Day trading is similar to swing trading, its just that day trading is swing trading on steroids or a fast forward experience of swing trading.
So before you start day trading you must make sure you can play the game in slow motion. If you are unable to master swing trading then you really have no hope of being a successful and profitable day trader.
Learn How To Walk Before You Run
Once you begin to understand how the markets work and know how to read basic indicators such as TICK and TRIN, you will get a different view of the markets and understand how they behave at different times of day.
You can only learn this is by watching the market in real time throughout the day. Before you start trading or even paper trading, you should spend a few weeks watching the markets.
Once you begin to understand how the markets trade at the open vs at lunchtime or the end of the day you will know how to better trade that time of the day.
Take a few days and only watch the pre-open and the opening bell and see how the volatility quickly rises and begins to fall off.
You should then start seeing patterns develop. Next watch only how the market goes into lunch time and comes out of it. Notice how the volume increases and more importantly how your chart indicators react to the increase and decrease in volatility.
Then spend a few days watching the market as it goes into the closing bell and notice how stocks that have been trending all day react to the last few minutes of the trading day.
No one can tell these things, you must watch and develop a “feel”. There is no way to learn any of this other than by watching the markets and monitoring your indicators to see how they react and more importantly what happens when your indicators are in conflict with each other.
At first it will look like a bunch of numbers flashing on the screen but after a while you will start getting in tune with the market and begin to understand how each part of the day reacts. Once you understand these basic steps you will be in a much better position to begin day trading.
So remember, you must walk before you can run. Learn how to swing trade FIRST then graduate to day trading if you so desire. You may decide that you like swing trading better.
It’s certainly easier and much less stressful.
If you are determined to learn how to day trade I would recommend learning from a mentor. Luke Murray who trades real time at Jason Bond Picks can help get you off on the right foot. You will be able to see exactly what he is doing and when he does it in Jason’s chat room.
Read my review of Jason Bond Picks
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– Robert Walsh