• Latest
  • Trending
Trader Lifestyle Picture

A Day in the Life of a Day Trader

November 12, 2020
Food Shortage Olubadan

Food Shortage: Olubadan Calls On FG, Govs To Adopt Irrigation Farming

January 2, 2021
E Commerce Indonesia

E-commerce platforms tap into Indonesia’s thriving sharia economy

December 29, 2020
Nigeria Economy Money

Nigeria will need to borrow more and that threatens fiscal flexibility

December 28, 2020
Binance Bitcoin

Binance launches bilateral Bitcoin European options

December 28, 2020
LiteForex Logo

Merry Christmas! 25/12/2020

December 25, 2020
Woman in Africa

Africa CDC: New virus variant appears to emerge in Nigeria

December 24, 2020
Bitcoin Africa Crypto

Bitcoin Events’ Blockchain Africa Conference Returns to Johannesburg in March

December 23, 2020
  • About
  • Privacy & Policy
  • Contact
No Result
View All Result
Brokers Index
Friday, February 26, 2021
Brokers Index
No Result
View All Result
Home Insights Lifestyle

A Day in the Life of a Day Trader

Therefore, this couple of hours is usually one of the most volatile and highly liquid of the day 

November 12, 2020
in Insights, Lifestyle
Reading Time: 5min read
0
Trader Lifestyle Picture

The life of a day trader may seem exciting, but it is a life lived on the edge. In a way that is partially true, as unexpected events or trading results can occur on any given day. The reality though is that most days are quite ordinary, nothing much exciting happens. Ignore the sales pitches and “glamour” image. Here’s what day trading is really like, so you can see for yourself if it is right for you.

Rise and Shine

Depending on your time zone, day trading may be a very early endeavor or allow you to sleep in. For the U.S. stock and futures markets, the hour before and the first hour or two of the day typically offer the best trading opportunities. If you live in Eastern time, that means you should be at your computer, ready to trade by 8:30 AM, or 9:20 (10 minutes before the official open) if trading stocks just during regular market hours. If day trading forex you have more choices, although typically the above time is good for day trading forex as well. U.S. companies and banks are opening for business, and London is still open for business. Therefore, this couple of hours is usually one of the most volatile and highly liquid of the day

ADVERTISEMENT

Preparation

Working from home as a day trader you can do what you want; no one is around to tell you differently. Discipline is up to you. Get up at least an hour before you start trading. Eat breakfast and mentally prepare yourself for the day.

  • Quickly rehearse your strategies in your mind. Been having specific trading-related issues? Create a plan for how you will handle them.
  • Check your trading account balance so you know exactly how much you can risk on each trade. Risking 2% or less of your account balance is recommended, 1% if you are new and don’t have at least several months of profitable trading under your belt.
  • Check the economic calendar, and make a note on your chart of when major events occur that day. Exit trades at least three minutes before a major economic event.
  • Ensure your trading platform is working well, and quotes are streaming.

Day Trading

Trade at least the first hour after the official open, 9:30 to 10:30 AM EST if trading stocks, futures or forex. If trading futures or actively traded stocks or ETFs, the pre-market—8:30 to 9:30—will also provide some of the best trades of the day. For forex, you can start a few hours earlier, especially if trading the GBPUSD or EURUSD. If the market is active, you may opt to trade until 11:30 AM EST. Around this time is when volatility tends to decrease as the “lunch hour” begins. New day traders often think they need to work more to make more, yet “less is more.” Avoid trading during the lunch hour; typically the minuscule pay off doesn’t warrant spending capital or emotional energy on trading during this time. If you wish to continue trading, do so between 2:00 and 4:00 PM EST. The last hour is a popular time for day traders as it is the second most volatile hour of the trading day. If day trading is extremely exciting and adrenaline is constantly pumping, there is actually a good chance something is wrong. If this is occurring the trader likely hasn’t adequately prepared for different types of market conditions, they are risking too much of their capital or they don’t have a plan for how to trade. A day trader’s job is to simply find trade setups. execute, and then manage those trades according to the strategy. If the focus is kept on that, there isn’t much room for emotional highs and lows.

Review

When the trading day ends—for some like me that can be 10:30 AM, and for others 4:00 PM EST—take a screenshot of your chart for the day. Mark trade levels, profits/losses for each trade, and then make a note which includes:

  • Hours traded
  • Number of trades
  • Number of winning trades and total of all winning trades in pips/points/cents
  • Number of losing trades and total of all losing trades in pips/points/cents
  • Net profit/loss in pips/points/cents

We make a note on our chart of profits/losses in pips (forex), points (futures) or cents (stocks) because these are scalable figures. Writing down dollar figures can be misleading, because your account balance may fluctuate over time, resulting in bigger or smaller trades.

Save each screenshot with a name: month-day-year. Create a folder on your computer and store these files for later review.

Each weekend, go through the screenshots from the prior week. Note where you made mistakes and what you could improve on. Practice these specific issues in a demo account during non-trading hours.

At the end of each month, repeat. Review the charts for the entire month (more quickly this time). Note what you are doing well and what still needs work.

Outside of trading review time, your work is done. There is no homework unless you need to work on a specific trading issue.

A Final Word on the Day in the Life a Day Trader

Day trading isn’t always exciting; many days are actually quite boring. Most day traders will admit that they love what they do, though. If you know your strategies well, not much will surprise you or get your adrenaline pumping…although the outcome of each trade is unknown when you take it. That does make it fun, but it should never be viewed as gambling.

Most day traders have brief days, working two to five hours per day. Five hours is high. Add on a few minutes each day for preparation, and review at the end of the day and week, and day trading still isn’t very time-consuming. You will have lots of time to focus on other interests. This is the end result of a lot of practice, though. It often takes five months or more of solid practice every day and on weekends before you can open a live account and expect to make a consistent income off only trading for a couple of hours a day.

Stay focused while you trade, but also review each week. Taking screenshots of each day you trade provides a historical record of every trade you took, and since it shows the circumstances of the trade this method is superior to a written trading journal.

Source: Thebalancecareers

Tags: Day TradingInsightsLifestylePreparationReviewTrading HoursWorld
Share1Tweet1ShareSendShare
ADVERTISEMENT

Insights

Bitcoin Africa Crypto

Bitcoin Events’ Blockchain Africa Conference Returns to Johannesburg in March

December 23, 2020
India Economy

The Indian economy is bouncing back | Opinion

December 8, 2020
Professional Trader

16 Technical Analysis Secrets for Boosting Your Trading Skills

November 29, 2020
Trader Lifestyle Tips

A Day in the Life of a Professional Forex Trader

November 27, 2020
Trading Account Protection

5 Tips to Protect Your Brokerage Login Credentials from Hackers

November 15, 2020
Brokers Index

Copyright © 2020 brokersindex.com

Navigate Site

  • About
  • Privacy & Policy
  • Contact

Follow Us

No Result
View All Result
  • Brokers News
  • Market Watch
    • Commodities
    • Cryptocurrency
    • Economy
    • Forex
    • Politics
    • Science
    • Stock Markets
    • Technology
    • World
  • Insights
    • Investing Adviser
    • Lifestyle
    • Trading Tips
  • Focus
    • Case Study
    • Editors Picks
    • Famous Failures
    • Success Stories

Copyright © 2020 brokersindex.com

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.