Many new traders often think that they need huge winning trades to make money and be profitable. This is not only a common misconception but an extremely limiting way of looking at things. Profitable trading strategies look different and need to be matched to your goals.
You can change the way you think about profitable trading. You don’t need to have huge gains every day and social media-worthy charts to be successful and profitable. Instead, focus on your personal goals and your desired income.
Ask yourself how much you’d like to make in a year. For example, if you want to make a million dollars within a year, you’ll need to make $4000 per day to hit your goal. If you’re aiming at $50k a year, you only need to make $200 per day. And once you are used to hitting this small and realistic goal, you can let your gains add up from your profitable trading strategy.
“Do not be intoxicated by the big money you see online,” Alex Temiz from My Investing Club advises. Aiming at increasing your size and buying power doesn’t always translate into guaranteed profit. Yes, your possible gain goes up with each additional share you trade, but so does the risk. People also tend to be more emotional whenever a large amount of money is involved, which often leads to reckless choices and poor habits.
When it comes to day trading, less is often more. Sticking to a small manageable position allows traders to focus on the chart and the setup. This way, money, and possible risks are not at the center of it all.
We recommend focusing on small and consistent gains. Posting a profit day after day will add up to the desired income over time. Experiencing major gains in single days is largely rewarding, and will propel your account forward, but you don’t need to obsess over chasing these highs constantly. Becoming a consistently profitable trader and having a good risk management strategy will still produce great results.
When you trade regularly, you can get desensitized to the process and start treating day trading as a video game. To an experienced trader, having a red day with a $1000 loss is not that big of a deal. On the other hand, most people would get very upset if they lost the same amount under different circumstances. Money somehow feels less real within the digital setting of day trading, and it’s easy to forget the real monetary value on the table. To combat this thought process, Temiz keeps a stack of 500 one-dollar bills on his work table to remind himself that real cash is involved.
As a seasoned trader, he also likes to reset his account as soon as it reaches $50,000. He finds it beneficial to keep the amount at the $35,000 mark since his goal is to grow his bank account, not his trading account.
Keeping a small trading account also pushes Temiz to be more disciplined. Working within a smaller margin and being closer to the account minimum reminds him how important risk management is. It also prevents him from acting loose with his money.
Patience, consistency, and resetting his account – these are the things that Temiz credits for his success.
If you’re looking for more tips from traders like Temiz, check our Youtube channel. We post weekly educational videos and advice from experienced traders.