Are you thinking of becoming a day trader? It can be a successful and rewarding path for many, but it can also be extremely challenging and ultimately cost others considerably.
Not everyone is built to be a day trader. It takes resilience, dedication, time, a good broker (here are companies offering forex services in India) and lots of discipline to get on a successful path. Top that off with needing a decent financial cushion for the tough road ahead, the chances of success may not be as high as you hope.
Should that deter you away from trying? Not necessarily. With proper preparation and taking a good look at yourself (to see if you can genuinely stay dedicated to day trading), you could surprise yourself and be quite successful.
Here are six common characteristics of a successful day trader.
Discipline
Discipline is at the top of the list because it’s one of the most important traits to have. A day trader must be disciplined enough to stay focused during market hours. Winning and losing on a trade can come down to seconds in some circumstances. If you lose focus on a trade, it could cost you greatly.
Persistent
A profitable trader doesn’t give up after a loss. Instead, he or she stays persistent with an end goal in mind.
When developing a concrete trading strategy, you’ll need to do test runs first. You need to try it out enough to gather the necessary data to determine if your strategy will work.
Market Interest
If you’re not interested in the market, your chances of succeeding are likely quite slim. You need to enjoy the markets because you’ll spend a significant amount of time watching, reading and learning about them.
A day trader is more than spending a few hours in the morning buy and selling stocks. They also spend hours throughout the day, catching up on the latest market news to prepare for their next trading day.
Patience
Patience is similar to discipline, as the two often go hand-in-hand. Part of being disciplined includes being patient and vice versa. Jumping into a trade too early because you couldn’t wait or selling too quickly because you got tired of holding can cost you significantly.
Being a day trader requires you to be patient in a trade, as you could be sitting at your computer for a while, waiting for the perfect time to exit and earn big.
Resilient
A day trader is also resilient in the sense that big losses don’t affect them too much. Being a day trader takes a bit of mental toughness to succeed. You won’t win everyday. In fact, you’ll have days when your losses significantly outweigh your earnings. When this happens, resilience is crucial to keep you going.
Don’t dwell on the losses. Remember them, learn from them and let them guide you to refining your trading strategy.
Emotional Control
Lastly, day traders need to have a good handle on their emotions. When you let your emotions take over in a trade, that is one of the quickest ways to lose everything. It’s important to think rationally, especially when you have a big loss. Not doing so, and you could enter into a trade you normally wouldn’t do.
After the list above, do you think you’d fit as a day trader? Start by finding a reliable platform to connect you to the market. Find MT4 forex brokers that can get you set up and on the path of success.
