The Internet is full of success stories of people making millions day trading on the cryptocurrency market and the stock market. Reading just a few is enough to make you curious about day trading crypto and stocks, and after you've read some more, you may become interested in giving up your day job and entering the market. But should you? And if you do, what can you do to help ensure your success? Read on to learn more about the mindset required to succeed with day trading crypto and stocks.
Can You Day Trade Crypto and Stocks?
Naturally, you can start to trade crypto and stocks online on your own whenever you wish, but in order to succeed, you'll need to have the following:
- Reliable Internet connection and a computer capable of operating at faster speeds even with multiple windows open
- Access to a trading desk that will allow you to execute orders instantly
- Extensive knowledge of crypto mining and the market
- Subscriptions with the websites of major news sources for researching the market
- Analytical software for automatic pattern recognition, broker integration, and backtesting trades
Risks of Day Trading Stocks and Cryptocurrency
Before you begin to day trade, you need to understand the risks involved, such as:
- Financial loss: Many traders lose much more than they make during their first few months of trading. While some eventually become successful, many others never do
- Stress: When trading becomes your full-time job, the trading that you've been doing for fun now becomes your means of supporting your family, and extreme stress may become unavoidable.
- Lack of work-life balance: When the markets are open, you'll need to be glued to the screen, which can make it hard to balance family commitments.
- Expenses: You'll need to spend a lot out of pocket on an ongoing basis on commissions, training, and software
- Potential for fraud: For all the honest newsletters and sites out there offering reliable tips and expert advice, there are dozens of impostors. Scammers target those new to stock and cryptocurrency trading and try to take advantage of their inexperience by making false promises, exaggerating benefits, or outright deceiving.
How To Promote the Right Trading Mindset
With day trading, you're always partially at the mercy of the markets, so some of your success may be out of your control. However, cultivating the proper trading mindset can help improve your chances of success. Following these tips can help you promote the right attitude:
Continuously Ask Yourself if You're Thinking Rationally or Emotionally
As a day trader, you need to be able to make quick decisions regarding buying and selling. Every second counts, and in those conditions, emotions can creep in and lead you to make poor decisions. Before completing any transaction, ask yourself if this is a smart move or an emotional one to help avoid this common pitfall.
Develop a Trading Plan and Stick to It
Before you make your first trade, come up with a carefully researched trading plan. Then, hold yourself accountable for sticking to it. Being disciplined can help you take emotion out of the equation. At the end of every trading week, take the time to evaluate your plan and modify it as needed.
Get Ready to Confront Fears
It's only natural to want to abandon an investment in the face of bad news due to fears of loss. In some cases, that may be the best move, but other times, fear can lead you to make knee-jerk reactions or hesitate to take risks that can offer big rewards. Accept the fact that you have some fear of failure and explore what your biggest fears are. Understanding your mind will allow you to assess whether the fear you experience in response to bad news is justified or not. If it isn't, you can then hold steady and may avoid missing out on potential gains.
Fully Commit Yourself to Research and Review
Because the market is constantly in flux, you're never done researching and reviewing as a day trader. Set aside time for daily research and review and be diligent about following through with it. When you tell yourself that research and review are as crucial to your success as trading, you'll be less tempted to forgo it.
You can't afford distractions getting in the way of your trading. Create a quiet space away from family and pets where you can focus on trading day. Identify things that can make it difficult for you to stay focused and come up with solutions to avoid them.
Try Day Trader Brain Hacks
Many successful day traders use brain hacking with nootropics to enhance their trading mindset. Nootropics are supplements that support cognitive function in different ways. A supplement geared toward increasing your level of focus like XeedLabs Focus Daily Clarity may help you keep attention focused on the trading day and think more clearly and quickly.