Posts Tagged ‘ Financial instrument ’

6 STEPS TO BE A PROFITABLE DAY TRADER

1. Financial Instrument: As a trader, you should understand the financial instrument that your trading whether it be stocks, options, futures or cfd’s. Each instrument has it’s own characteristics and personalities. Find which one is similar to yours and concentrate on that financial instrument. Best way to find out which one suits you is try demo accounts for those instruments, with the number of brokerages out there, you would be able to find a brokerage to have demo accounts for trial.

2. Capital: Once you determine the financial instrument you would like to trade , determine how much capital you would need. Remember, risk only what your willing to lose. If your a newbie, you might have a beginner’s luck in one-two trades i.e. why having sufficient capital to start your trading is utmost important.

3. Broker: Whether your profitable or not, you will always have to pay commissions for whichever financial instrument your trading. Find out which broker can provide you the following:

  • Low commissions
  • Stable and reliable platform
  • leverage
  • excellent customer service
  • easy to deposit and withdraw funds
  • trading room with trading mentors.

If you trade stocks then you reach out to me for which broker I use.

4. Trading Mentor: This is going to be one of the trickiest part, with some many traders out there and so many trading rooms. It has become confusing at times to find out which mentor is good for you. But once again, most mentor out there who run a trading room, they would have free trials to their room, so try to get access to it and spend atleast a month at a bare minimum and understand his strategy or personality and see if it resonates with you. @stocktwits has a lot of traders in there, you can see the posts of those traders and see if they fit your personality.

5. Trading Plan:  Trading is like a business, if you don’t have a plan of action your bound to fail. It’s only a matter of time, once you determined your trading mentor.  Ask the mentor to develop trading plan for you and help you with understanding risk management.

6. Trade Small Sizes: As a new trader when you start and have done all above 5, you will feel your pretty much invincible. But let me tell you straight up, if you keep hitting big sizes as a newbie, your account will shrink faster than you can hit those keys on your keyboard and you won’t even know what happened.

Hope all of this helps.

Follow me on twitter @dchsn6

Follow me on stocktwits @dchsn6

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