Most day traders incur heavy losses in the first few weeks of their trading and leave day trading after losing all the capital. Why would they lose all their money and quit trading? not because they are inefficient. These day traders have just an above-average education on financial markets and lack of trading education.
All newbie traders think that trading is easy and a way to make quick money. They think that since they are successful in their early activities they can trade consistently with high accuracy. They think that they can invest small amounts and trade for large LOT SIZE to earn big profits by utilizing high LEVERAGE on their margin amount and fail to understand the effect of trend reversal on their trading capital because of too much exposure. They ignore that day trading is a highly challenging business which will reward only to disciplined traders. Most importantly they ignore to understand that they should learn before starting day trading.
you should thoroughly educate yourself to earn consistent profits in day trading, also you need to educate yourself on the psychological approach of the market and strong discipline to follow money management techniques for your account size. You should also educate yourself in the correct entry and exit methods of your currency pair.
Trading is not an exact science, But more of an art, There is no magic formula. Trading is all about probability. Art to correctly apply from a set of rules on specific chart patterns carefully and allocating the probability of that event to result in success. The way you approach the market psychologically has much to do with your success as any trading plan.
Money management plays a crucial role in becoming a successful trader.
An adequately funded account is necessary, not only to be able to take the traders you want but also you don’t feel every trade is a life or death situation. If you have only small capital, trade with that capital only. Don’t try to make big money by utilizing up to high leverage on your small capital. To become a successful trader ask and answer yourself the following questions: How much equity do I need to start? How much should I risk on each trade? Am I undercapitalized?
As you begin the journey to become a successful trader you will confront your deepest fears. Your armor on this journey will be confidence, knowledge and believe in yourself that you can achieve your dream.
As a day trader, you have to realize that you have no control over the market and if you accept this fact then you should also accept that you cannot influence the direction of the market.
Intense excitement when you hit a winning streak is almost detrimental as becoming depressed when you have a string of losses. As a day trader, you have to learn to balance the state of impartiality over winning and losing of trades. You have to accept the fact that you will have losing trades readily as you will have winning.
Reach the stage where you comfortably accept the loss for the knowledge that your method of trading will produce profits in the longer term.
Once you become a disciplined day trader, then the possibilities are endless to earn consistent profits in day trading.