Steps To Success

That begs the question, how do you do it then? Here are the steps to success as a day trader as I see it.

1. Success at trading. Don't try to day trade until you've proven to yourself that you can trade successfully at a much slower pace.

2. Sufficient capital. If your trading account isn't in the high five figures, you shouldn't day trade (if that's going to be your only source of income).

3. A winning system. Day trading is harder than any other kind of trading that I know of. You really need to make sure your system will hold up. A system that works in a slower time frame will not necessarily work for day trading. Make sure you're system has a positive expectation.

4. Practice. Practice makes perfect. Yes, it's a tired old phrase, but it's true.

5. Patience. The market will try to destroy you as a new day trader. Have patience. Hang tough. You will make it, provided the previous four items are in order.

The correct education

If you are starting a new venture, no wonder you will like to have the right amount of education. Being prepared from beforehand is a sure way to crease out a lot of glitches that will eventually arise in your first days of trading. But the truth is, though there is a lot of material out there on the wire, very few of these really walk the talk.

Which should make you very cautious. If the dearth of education is one thing to be afraid of, to be trained with the wrong education is a bigger concern. It might be tougher to unlearn your initial lessons as you grow as a trader. But this is a part of the process. So don't hold on too tight on that strategy you began with. A better strategy should be out there, discovering which will make you a better trader.

Be a voracious reader. You will need to crunch a lot of data in the first few month to get into the grind. Weigh each bit of information and think of the exactly opposite. Hold a debate in your mind to realize the full potential and impact of that bit of info. A lot of portals exists to teach newbie traders. I will include some of them which I found useful in my initials days and I would recommend to a fellow trader.

98% failure rate

The hype of the failure rate has to addressed early.

I don't quite understand what feeds this hype. The truth is that with any business, a lot of new ventures are bound to fail. Whichever field you may be active or employed in, I am sure you can recount 10 businesses or people who failed for every one that succeeded. In fact, 95% of all registered companies get dissolved within 3 years. Forex trading is also a business, an enterprise. The reason why it is also subject to this failure rate.

Another belief that is completely personal to me is that 98% of people end up being in a field which is not their chosen best. How can they succeed if they are not in love with their work. Majority of the failed traders are people who came in to make a quick buck and move on to something else interesting to them. They add to the woes and the stats.

I don't want to say that these people will never be good at investment decisions. I would rather say that they should not be actively involved. We have a lot of other options to grow your wealth through regulated, managed funds. However, currency trading is something they should never try out first hand.

So decide if you have a belly for this sort of high risk investment. This decision will definitely make your next steps easier.

Taking the first baby steps ...

Though Forex has been around for 30 odd years, established after the abolition of the Gold Standard, it was not available to retail traders till off late. It was the battleground for corporate giants, banks, governments and large managed funds. Recently, those boundaries have been made off completely. So now, you and I can take part in the action and see where it can take us.

There is a lot of pessimism involved around anything dealing with forex. A lot of people have lost money and will keep losing. Because Forex Trading is a zero sum game, someone loses if someone has to win. This makes it edgier. Hence, it is always said that 98% of all forex traders are bound to fail!

To start with, I had to shave off this pessimism. Its not necessary that whatever you heard is true. The reason is a lot of people do it in their own ways and the results they get are for their own. It won't apply to you particularly. There's a huge amount of discipline and patience involved - which any successful trader would agree with - and these two qualities are not everybody's forte. So you need to determine if you have enough of these. And still greater is the control you need to put a leash on these two aspects.