What does it take to become a professional day trader? You probably reached this page because you are considering learning how to day trade. I would like to share some insight as to what it takes as I have been in this industry for well over 10 years.
We have also trained hundreds of traders around the world and have seen the results of what it really takes to become profitable. We are also asking our (now live) Colombian traders what they think is the key to becoming a professional trader. Our Colombian traders just went live two months ago and have been doing very well.
The video below will give you some insight from both an experienced trader and novice traders:
We cannot stress enough how important discipline and psychology are in order to see consistent results when learning how to day trade. It isn’t about fancy software systems or indicators. It comes down to controlling your emotions and managing decisions when you are trading.
If we aren’t disciplined enough to follow our own plan, then how do we expect to become profitable? Discipline is one of the most important aspects of becoming a professional day trader. The discipline to stay in a trade when it may fail, the discipline to stay out of a trade, and the discipline to know when to quit.
Sometimes our best position is to sit on our hands.
One must also know his own risk tolerances and personality. We have Master Traders that finish within 10 or 20 minutes of the market open and others that trade the entire day. Instead of trying to mimic and copy someone else’s style we should learn techniques and incorporate them into what we feel comfortable with.
We are always going to make mistakes, take bad trades, and lose some.
But having the discipline of identifying all of those things is what makes us better. Have the discipline to take all of the valid trades that you should be taking according to your strategy (assuming of course that you have a viable strategy).
Have the discipline to ensure that the market is not leading you. Instead tell the market what you want it do to for you.
It takes a lot of work and at the end of the trading day one should be exhausted, because battling the market everyday is no easy task.
Sometimes we get frustrated when the market gets away from us and we can’t take a trade. You know the days that I am talking about. The market runs up ALL DAY and never pulls back for a trade. Then at 11.45am EST the market finally pulls back to give that picture perfect opportunity.
Most of us are not disciplined enough to wait. We aren’t disciplined enough that we start throwing orders left and right only to frustrate ourselves or, even worse, blow out an account. The difference with DTA is that we have all been there. Our CEO and Founder, Marcello Arrambide, took out $25,000 in student loans to start trading and he lost it in a month. Our Master Trader, Mark, took a leave of absence from his job only to start losing money when he went live.
A lot of money.
These are only two examples we could provide many more.
But if we are disciplined to wait for that moment. That moment when our rules are met and we can take a high probability opportunity. Only then, will we be able to see consistency over time.
But it all starts with discipline.
Psychology & Preparing Yourself
Mark made a presentation at our annual pro trader’s seminar about preparing yourself for the market. Ever wonder why when we were in math class at age 14/15 they made us do all of those exercises for homework? Play sports do you? What about the endless repetitions that is done during practice.
When you try to ride a bicycle 99.9% of us fail.
Most of us start with training wheels, because if we don’t we may be badly injured. We still end up falling the first time, but we try over and over again until we finally succeed.
After that first time of not falling we create a new wrinkle in our brain that allows us to remember how to ride a bicycle.
By preparing ourselves for the market the right way we create that new wrinkle in our brain as well.
The only difference between day trading and a bicycle is that we have to train ourselves to ride that bike on a different terrain every day. The markets change and it will never look the same twice. Ever.
It may look similar but it will never be exactly the same. Market behaviors are now more erratic and unexpected than ever. The (then) 85 billion dollars a month that The Fed was pumping into the financial system has created waves not only in the states but all over the world.
We have to subconsciously prepare ourselves for the market so that we don’t “think” about what is happening.
Instead, we react to the market subconsciously.
Exactly like that. Any questions?
Confidence & Believing In Your Trades
When we decided to go on our Graduate Master Trader tour we eventually made to the Hit Man’s house in Nantucket Island. We wanted to be there when our master traders reached the point where “they’ve made it”.
For Hit Man, otherwise known as Nikolai, he was sick and tired of being sick and tired.
We were there for the moment that he quit his job. His first day it was a profit of roughly 3 points. I still remember when he put in his order and he turned and looked at me and said “I don’t care what happens I know this is going to work.” I knew at that point that he had the right frame of mind. He wasn’t going to back to simulation or back to a job ever again. We were going to make sure of that since Nikolai is family now.
It isn’t easy to put our money on the line. We work very hard for the small amount of cash that we earn in the grand scheme of things. Parting with that money is a deep emotional issue.
An issue that we have to battle ourselves. There are no reinforcements that come to rescue us when we have to look in the mirror and battle our own demons. It is up to us to turn around and go toe to toe with those issues. If we decide never to confront them we will never be able to succeed.
Nikolai – going from DTA student to DTA master trader and teacher.
If you are seeing positive results on simulation then carry that over into live. There is always an adjustment period after you go live but if you can do it on sim then you can do it live.
We would even go further and tell you to have someone setup your platform so you don’t know whether you are trading sim or live. We plan on introducing that feature in a new trading platform that we are developing for our in house traders.
Review your trades every day, every week, and every month. Go back and take a look at all the decisions that you are making and whether a trade is positive or negative and decide whether it was a good decision or not.
We hope that this gave you a bit of insight into what it really takes to become a successful day trader.