How to become a successful day trader?
Just like any other skill in life, there are two aspects to trading – the technical and the psychological. One needs to master both to become a successful trader. Needless to say, it’s a very long road but the destination will be fulfilling. Let’s delve into the details:
Learning how to day trade is the first step every beginner should take. This includes learning and expanding one’s knowledge base about the various strategies, concepts, and rules. An extensive day trading course will cover all these and more.
Some important concepts that one should be aware of before beginning to trade are those of price action, as well as technical analysis strategies and indicators like RSI, Bollinger Band, and Moving Averages. The most common tool to use for intraday trading is the candlestick patterns which should also be learned.
Another key component of successful day trading is maneuvering through time frames. Investopedia defines a time frame as “ the amount of time that a trend lasts for in a market, which can be identified and used by traders”. Quite obviously the longer the time frame, the more reliable the signals being given.
Through a proper intraday trading course, one can learn to create strategies for the five to fifteen minute time frame. They can also gain enough knowledge to move between time frames i.e going from 5 – 15 Minute Time Frame to Daily, Weekly & Monthly Time Frame. The ability to move between time frames and avoid traps is the key to a successful trader.
The most optimal time frame for a particular day has more to do with the trader’s personality than the script or the market itself. intraday trader training use time frames between fifteen to thirty minutes and go all the way up to sixty minutes too at times. The most commonly used are 15-minute and 30-minute timeframes on the chart.
The entire process involves finding a favorable setup, taking the relevant position, and then exit on the same day as well. Having a feel of the overall trend of the market(also known as the breadth of the market) is also a helpful indicator. For example, if the market is going on a strong uptrend then going short is probably not the best idea. Thus efforts should be made to align trades with the broader market.
Another concept is that of Scalping where the time frame is between one to five minutes. Some use a fifteen-minute timeframe too at times.
Though the benefits of intraday trading are many, it is only if one can master the psychology of trading that they can truly master the art of trading.
Trading is essentially 97% Psychology— it is important to learn how to manage your mind effectively and efficiently. Your way of dealing with your hits & misses, and maintaining the correct level of confidence (i.e neither overconfidence nor a lack of confidence) while remaining true to your principles is extremely important. To be successful at this game, one needs to learn how to cut the noise out, deal with FOMO & maintain your Stop Loss or Target Price. It is only then can one differentiate themselves as a successful trader compared to other novice traders — and a proper intraday trading course will provide the necessary learning experience through tailored sessions that are extremely crucial to building a sustainable trading journey.
In conclusion, intraday trading is a much harder mental game than most other securities. To be able to think quickly and maintain discipline while keeping their emotions in check are key characteristics that separate a successful trader from a novice.
Tips for beginners:
For beginners, it is better to start with swing or positional trading. The time frame for swing is daily to a few weeks, while that for positional is a few weeks to a couple of years.
In India, the best time frames to trade (especially for beginners) are fifteen-minute from 09:45 a.m. to 10:45 a.m. and 02:30 p.m. to 3:15 p.m. It’s best to wait till 9:45 am at least as the market is reacting to the previous night’s information at the open.
It is also advisable to avoid small and mid-cap stocks for the first two years of trading. Sticking to say the Nifty 50, and trading in small quantities will help one gain the correct experience. Like we previously mentioned, understanding oneself is also of utmost importance – are you a trader who likes quick trades, or do you feel more at peace if you have held your positions for longer?