We all know that there are a lot of people who want to succeed as day traders–to have freedom over their time and destiny and create an independent way to make money. There are classes and strategies and invitations to trade everywhere.
But according to many studies, most day traders lose money. Success is nowhere to be found. They are left frustrated and with a lower bank balance.
So, how hard should it be to make a living day trading?
It’s actually quite simple. If you have a good strategy and a good teacher, you can probably learn to day trade successfully within several months.
Conversely, learning to day trade can be incredibly challenging! This is not usually because of the market, or anything specifically related to the stock you are trading. Nor is it because of the equipment/platform/charts, etc. you are using . . . nor the indicators or any other methods you have tried. The challenge doesn’t reside in the market per se.
WHAT IS THE REAL CHALLENGE?
The challenge is really the battle and conflict you have inside your mind that takes over, puts itself into the driver seat, and can destroy your trading plans. It is there when you feel out of control, panic, are ignoring your plan or stops, miss your entry from fear, etc. Most traders have had this experience!
What can you do about the battle in your head? In a moment I will give you tools to help get you started.
I recently started working with a trader who was struggling with this challenge. His focus was on spending eight hours daily in front of the market/screens, taking a certain minimum number of trades daily, and working as hard as he could so he might be profitable sooner. His belief was, “The more and harder I work, the faster I will get there.”
This is a common belief and really stems from the work ethic of our culture. Our culture values hard work, putting in the time, and holding your nose to the grindstone. For many entrepreneurs, we hold the belief and value the concept of working harder to get where we’re going, faster. In the business world, that generally works well.
But, for traders, this belief is inaccurate! One of the most challenging things that I’ve seen for Traders is the desire to work hard!
ARE YOU “WORKING” TOO HARD?
In my experience personally and working with traders, the reality is often that the more time you put in and the harder you work, the less successful you become. Tension sets in. Focus decreases. The more focused you are watching the market tick up and down hoping it’s going to do what you wanted, the sloppier the discipline becomes. Successful trades made in the AM give way to losing trades in the afternoon, and the money is given back, for example.
I think what is important is what “work” you are focused on. For example, if you are learning how to use the trading platform, the trade strategy, and any tools, this is a great place to start. If you are creating your trading plan, putting it in writing and testing it, this is also critical, and time well spent.
Conversely, many traders enter the market looking for profit right from the start. If you are prematurely trying to trade for profit while studying and learning, it’s unlikely to work. Studying is critical to master the concepts. But rather than spending eight hours daily with the market, studying and attempting to make money, turn your computer off!
WHERE SHOULD I FOCUS?
Now you can focus on the equally important work of training your mindset. This is the “trading psychology” you might have heard of in passing. Mindset work is generally done away from the computer. I suggest slowing down, spending less time in the market, and working with a few simple tools to start incorporating mindset work.
Essentially, this includes focusing more on your inner dialogue and inner well-being. There can be resistance to this idea, I know. But this is where you acquire the most important skills for trading. The ability to be able to direct and trust yourself.
So, to recap and maybe clarify:
1. Too much “work” in the charts and market ends up being a losing proposition.
2. Much of the work to be done as a trader doesn’t reside in the market, but rather is personal growth work (you do often away from the market) that prepares your consciousness for discipline and consistency.
Here are some suggested tools to work with to get you started:
–Limit the number of hours spent in front of the computer. That number is up to you, but I suggest 3 to 4 as a maximum, or less.
–Start journaling. Write downwhy you are taking trades and how you are feeling as the trade progresses. The goal is to have awareness of what’s going on inside your mind while trading. You start to notice patters as you tune into yourself.
–Find and start a meditation practice that works for you. This helps build discipline, focus, and calmness.
–Create a trading plan in writing that clearly spells out your strategy, level of risk, entries and exits, and other appropriate components. And then follow it.
–Monitor yourself. If you can’t follow your plan and you keep creating losses, doing more of the same is going to create more negative results. Consider getting help to get past whatever is blocking you.
If you embrace the importance of mindset work and spend a good portion of your learning, time, and focus here, then you will be on the path to success.
WHERE IS YOUR FOCUS?
I invite you to look at your own trading. Examine how you are spending your time, how you’re feeling in front of the market, and how much you are “pushing” rather than allowing.
What is the level of anxiety trading? Or, do you have peace? Be willing to start exploring this part of trading (YOU). I often say, “Place half of your focus on the market and half of it on yourself–your thoughts, your stress level, body sensations, thoughts, etc.” This helps increase yourself awareness, critical for trading.
So, consider taking some of your focus off the market itself and place it on you. Because the solutions to your ongoing trading challenges reside inside you, not in the market.
I hope that was helpful…