Day trading suitable for you?

Day trading! Are you ready?

Day trading

People often say that stock securities are a waiting game. So one can only imagine the risks involved when people involved in day trading try to accomplish the buying and selling of securities all in a single trading day. In fact, this venture is so risky that some people even refer to it as gambling.

Even the provisionary beginner’s luck is hard to come by when it comes to day trading. It takes some careful planning to earn positive dividends in this undertaking. If all goes well, one can leave his or her day job to earn loads of money in day trading. But it involves a strong and persistent approach to trading.
The positives here include the ability to close a deal within a single day, thereby eliminating further overnight risks. This is no laughing matter as huge profits can evaporate in an overnight. Also, there are no surefire secrets, just indicators of market trends.

Day trading! Perhaps, there is nothing more exciting than trading stocks for a living. If you are a typical 5-9 job goes.

  • You really hate it when your boss tells you to work on this and that. You do not want to be a slave anymore, you would like to answer to nobody.
  • See no future at all in your typical boring day job. You will always be that little work bee whom everyone can assign work. You are at the bottom of the food chain.
  • You hate office politics. Some people can be your boss just because they are better at office politics than you. You are always the one that does all the dirty work and gets no credit.
  • What you do every day is more boring than flipping burgers.

If you become Day trader

  • All the above gripes will be gone.
  • You can profit in a bull market, a bear market or even a range-bound market.
  • The sky is the limit. If your system can bring home 3000 INR every day, then it will possibly bring home 50000 INR and more.

 

Before you get all excited about day trading, you will have to ask yourself one simple question. Why do 99.99% of the people around me have a boring day job?

Is it risky?

The answer is no. Intraday Trading is much safer than investing. You close all your positions before the market closes every day. Thus, you avoid the possibility of a gaping-up or a gaping down the next morning. If your risk control is very solid, day trading is not risky at all. That is also why most brokerage houses give you a 1:4 leverage buying power for day trading instead of 1:2 for overnight. Nevertheless, I never use margin.

Is it hard?

The answer is yes. The hardest part is your market psychology and discipline. It will take you a long time to master these 2 things. And I am sure that you will relapse after a few good trades. Intraday trading for a supplementary income is easier than for a living since you have no pressure to make the ends meet every month. Of course, if you have a consistent system to make a supplementary income, then you can easily transition to trading for a living.

One single most important thing is that there is absolutely no shortcut in trading. You will be a profitable day trader only after a tremendous amount of hard work.

Here are 10 preconditions I think you need to meet.

  1. You should be available from 9:30 AM to 4:00 PM.
  2. You should be realistic about your gains.
  3. You should know it will take you quite sometimes before you can be profitable.
  4. You should know it will take a lot of hard work.
  5. You do not depend on trading for your main income, which would put too much pressure on your performance.
  6. You should have at least 3 lakh disposable income. The more, the better!
  7. You should have a decent computer, a dual monitor setup and high-speed Internet.
  8. You should be optimistic and upbeat about your trading.
  9. You should have solid knowledge of technical analysis.
  10. You should know you will lose some money in the beginning, which is the tuition everyone has to pay. You are not an exception!

 

It is easy to get all your hardware ready. But it will take you a long time to be mentally ready. You will ride your emotional waves up and down for quite a long time.  I think the coolest part if you can make it, is that you do not have to answer to anyone.  Good Luck!

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