Table of contents:
- 1 What You Have To Reckon With If You Want To Learn Day Trade Successfully
So you are interested in day trading and want to start as soon as possible? Have you thought it over well? I know, I can’t stop you anyway.
So I use this article to tell you about my daytrading experiences that I have gained in 8 years.
Yes, you can become a (multi)millionaire with daytrading. Yes, day trading can change your life completely.
But it won’t be a walk in the park and if it’s just a sentence you want to take as input from this article, then please take this one:
“Day trading is the devil’s work.”
What You Have To Reckon With If You Want To Learn Day Trade Successfully
A quick background:
Since I was 18 years old, I have given myself inexorably to the stock market piece by piece! Both professionally and privately. As I am 29 years old today, that was exactly 11 years ago.
I saw a book by Warren Buffet at a friend’s house and asked him: “Who is that?”
“The (then) third richest person in the world with about 60 billion dollars in assets, achieved through stock investments!”
On that day a whole new world opened up for me and the incentive to become a successful investor as well.
What I was not aware of at that time, with the motivation to succeed on the stock market, another emotion was born at the same time: “greed”.
I opened a securities account with an online broker within a few minutes and three days later I made my first trade on a German solar share. The return on this investment? -100%… The company went bankrupt at the end of the subsidy wave.
Shortly afterwards I started my apprenticeship as a bank clerk and became familiar with the world of warrants. Since my custody account only consisted of a three-digit value, the warrants were apparently a good way to earn a lot of money with little effort. The yield? I don’t know, but over the years more than 5.000 EUR have been lost!
During my bachelor’s degree in “Finance” I became aware of other derivatives. Options and futures I could now construct but the trading was also underground.
After I had got to know almost the complete product range of the investment banks, I finally got stuck on CFDs and day trading. What a blessing. Or is it?
Daytrading experience with derivatives – curse or blessing?
Under the title “My first year as a CFD trader” I wrote a complete article about this nerve-wracking time.
I noticed how quickly derivatives can increase my account balance tenfold. And destroy them as well.
After this first year, I took stock of myself and realized that I had been losing money on the stock exchange and in derivatives trading for years. Sometimes things went up for a week, but in total I did not have a quarter with a positive outcome.
Why was that?
Although I had read several books about investments and later also about day trading every year and had mastered the theoretical basics, I simply could not trade successfully in the long run.
Parallel to my horrendous losses, however, I kept seeing pictures of supposedly “successful traders”. Also in various trading forums private traders reported about their monster trades and how great they were.
I also wanted to be able to live from this success and trading. And I wanted an Aston Martin…
Especially this contrast encouraged me to try out new strategies again and again and to lose control after a few losing trades in a row. This in turn led to trades with such exaggerated position sizes that the market hit me after a few minutes.
After 8 years of stock market experience with constant losses, now in the five-digit range, I then spoke a serious word to myself: “You absolutely must change something! You now have a family and financial responsibility!”
The result of my personal conflict talk was a new beginning. I opened a new account with a CFD broker and looked for three mentors who had a lasting influence on my attitude towards trading and definitely made sure that I finally got the hang of it.
But much more important. I know how the supposed Super-Trader really is.
What nobody tells you about day trading [negative]:
I have compiled five important facts about day trading below.
- Nobody can trade successfully from one day to the next
- The people who became millionaires with just a few trades were rid of the money after 3 more trades (no risk management, no discipline, everything gambled away).
- Only the profits are shown, never the losses
- Only 95% of all private traders are unsuccessful with day trading
The mistake that most trading beginners (and even advanced traders) make is to believe in – and eternally search for – a trading strategy that ALWAYS produces winning trades.
That is, they don’t understand that loss trades are part of trading, because the market is unique every day! Every move is unique.
Moreover, trading beginners and the unsuccessful advanced traders think that they must always be invested in the market. That a day without trading is a lost day is bullshit.
Many instructional videos, textbooks and bloggers unfortunately only write about topics like “When and how to trade” and “When does the perfect trading setup appear”.
However, it is much more important to write about when one should NOT trade. Unfortunately, very few people can do this, as it depends on the trading strategy and the current movements in the market.
Each trader must therefore determine this state himself, because it is individual and can depend on the market situation as well as on his personal condition.
What nobody tells you about day trading [positive]:
There are of course also positive qualities in day trading.
- Day trading allows you financial independence (Ok, you already knew that)
- A functioning trading strategy can be learned and implemented
- It is not the monster trade that triples your account balance, but constant small profits that are needed
- A positive track record over a relevant period of time formally attracts investors
- Even small trading accounts can be traded sensibly and be interesting for lenders
It is important to me at this point that you set up your mindset professionally.
Say goodbye to quick profits and develop your trading setup in peace and with the necessary discipline.
You can see a successful trading account and a trading account sentenced to death in the following diagram.
You can see that both accounts are in profit, but also that the left course is much more professional (because more constant and less fluctuation).
Unfortunately I realized this fact very late.
It took me a total of 4 years and about 20.000 EUR “trading training costs” to minimize my losses and to achieve constant profits.
With this contribution I would like to help you,
- not needing 4 years for success in trading
- not to “lose…invest” 20,000 EUR,
until there are constant profits in trading. My daytrading experiences should open your eyes and help you to be careful and critical with dubious online offers.
In short: If you want to become a successful trader, you are in the right place.
Important: There is no guaranteed winning formula in stock exchange trading!
Our trading is called discretionary trading, in which we have to generate new trading ideas every day based on a developed trading setup and make decisions for or against a trade.
If you do not have any stock market experience, I advise you not to gain first experiences directly with day trading but with classic investments.
If you already know how to trade a share on the stock exchange and how account balances change, but you would like to try your luck in day trading, make yourself aware that there are different rules.