As a trading mentor, I have a lot of discussions with our traders and a common theme that comes up is traders hunting for trades. Part of day trading is absorbing the information the market is giving you and making trading decisions based on it. However, when being bombarded with information, it is easy to feel like you should be finding trades easily and when you don’t find them the next easy thing to do is go hunting for them. I frequently here phrases like, “I’d done nothing for 3 hours, so needed to take a trade,” “I was down so I took that trade to get my money back,” “I thought x pattern would show up so I got in early.” These are trades born out of hunting an opportunity as opposed to the patient art of fishing for one.
How To Be A Day Trading Fisherman
Day Trading futures is all about patience and this is where the analogy to fishing lies – not in throwing a line out (taking a ‘tester’ position) but in carefully preparing, knowing your trading strategies in detail and picking the right time to execute (pull your line in). This is especially pertinent to day trading beginners, who lack experience and can therefore be drawn into low value trades due to impatience caused by a limited number of trading strategies. Whilst there is a opportunity cost in not taking trades this has to be balanced against the impact that losing on low value trades has, both in terms of capital erosion, reducing the ability to take on your high quality trading strategies and the mental impact of loss of confidence. As one of our Elite Traders put it to me recently: your activity should be proportional to your experience.
Preparing Your Day of Trading
Having a consistent preparation process is your first step, this has multiple benefits. Firstly, it ensures you have digested all the important information before beginning trading – this is done through a process of asking questions that give you objective answers, for example: has volume been increasing or decreasing recently? at what point would the current trend be considered over? By moving consistently through time frames to establish direction, presence of different participants, strength of a move and lastly where trading strategies can be executed; your day can be mapped out but also compared directly to other similar days. This is the second advantage of clear preparation process: It make debriefing easier and gives the opportunity to develop specific strategies to certain day types.
Know Your Day Trading Strategies
As a day trading beginner you may only have a couple of strategies you know well (hopefully this number will grow quickly with consistent preparation and debriefing) but this can be enough. I discussed this idea in an earlier blog: as long as you understand the details of your trading strategy you can execute with confidence. This has the additional benefit of creating patience by allowing you to skip the trades that don’t fit the specifics you are looking for.
As time goes by more trading strategies can be developed, based on your ability to compare days from your preparation process. This should be a constant aim to build a repertoire of strategies giving a greater number of opportunities to trade without the need to go hunting for them. Enjoy the creation of new ideas as this is what leads to greater understanding, opportunities and involvement.
To learn to trade with the market profile and develop your career further as an elite trader then check out our full range of Trader Training courses. Our flagship 8 Week Career Programme can be attended live on our London Trading Floor or virtually from home as an online trading course. We offer the most comprehensive training programmes in the proprietary futures trading industry which are based upon years of successful in-house skills development.