| Copyright (c) 2009 Scott Cole | | | | large directional moves. Remember, if you intend to be |
| In the current economic environment, many of us are | | | | a scalper, you must be glued to the computer screen |
| looking for new ways to make a living. Many of us are | | | | for hours each day. That can be tough for most |
| sick and tired of the daily grind and are searching for | | | | people. |
| ways to work at home. That is why many people turn | | | | 4. Determine what your basic profit goal will be, and |
| to day trading stocks, currencies and futures markets. | | | | DO NOT make this a monetary figure! Gary Smith, |
| Unfortunately, the vast majority of people who enter | | | | who wrote "How I Trade For a Living" simply had the |
| the world of day trading are unsuccessful. Trading is | | | | goal of being profitable every month. It didn't matter |
| an extremely difficult profession, and most people are | | | | whether he made $200 or $2,000 in a month, he |
| not psychologically prepared for the pitfalls. They read | | | | simply wanted to make a profit. Adjust your goal for |
| one or two trading books and feel that they are | | | | how you will trade. If you decide you want to be a |
| armed and ready for the challenge. However, most of | | | | scalper, you probably want to have a goal of being |
| these books contain conventional wisdom, and a | | | | profitable every week, if not every day. |
| regurgitation of old ideas that rarely work. | | | | 5. Determine which market, or markets you intend to |
| The fact is, most people are not prepared to accept | | | | day trade, and then learn all you can about what |
| that most trades will be losers or breakeven trades. | | | | makes those markets work, and what influences their |
| Most people want to be right the majority of the time, | | | | prices. In the stock market, it is very difficult to learn all |
| but trading is not about being right, it is about making | | | | there is about how the market works, but if you learn |
| money. | | | | the basics, you will gain a better understanding. |
| With all this in mind, here are a few basic ideas on how | | | | 6. Begin by paper trading first, then when you are |
| to start your day trading business. | | | | ready, trade with very little leverage to start. You want |
| 1. First you must determine how much capital you can | | | | to get a feel for whether your strategy will work or |
| trade with. This must be purely risk capital, money you | | | | not. Confidence is a key to success. Also, even if your |
| can afford to lose without hurting your lifestyle. You | | | | strategy is working while you paper trade, things |
| can start day trading futures indexes with as little as | | | | change when real money is on the line! You must |
| $5,000, but you need $25,000 to day trade stocks. | | | | maintain the discipline to follow your strategy, if you are |
| 2. Be sure you have ANOTHER means of income to | | | | confident it will work in the long run! |
| pay your basic bills. It is extremely difficult for a new | | | | 7. Keep detailed records of your trades! This will help |
| trader to live of income from day trading. If you've | | | | you identify your skills and faults as a trader, and will |
| recently lost your job, find a part time job elsewhere | | | | benefit you in the long run! |
| that still allows you the time to day trade, if day trading | | | | These are just some basic thoughts on starting a day |
| is the direction you want to try. | | | | trading business. There is an incredible amount to learn |
| 3. Develop a specific strategy for day trading | | | | about day trading, and the fact is, most people fail. |
| whatever market you intend to trade. For instance, if | | | | Trading is just like any other skill profession...it requires |
| you plan on day trading E-Mini S&P 500 futures, you | | | | education and experience to become successful, |
| must first determine whether you want to be an | | | | otherwise, we would all be doing it! |
| intraday scalper or whether you want to profit from | | | | |