1. You can start with a very large account and earn a little bit of silver (perhaps not difficult). This requires very strong capital but does not require much knowledge and skills.

2. Another option is to start with a small account of $ 10,000 to $ 30,000 and make a high profit to survive. This requires a lot of knowledge and skills, but only a little capital.


HOW LONG IS THE WAY TO SUCCESS

Before you can trade intraday for a living, you need to know that only 4.5% of day traders can trade for a living. The chance to have a better life through trading is even smaller. 4.5% of traders making a living on this market basically have to spend 6 months to 1 year with an average of 8 hours/day (full-time 30-40 hours/week) to study, practice and trade before they reach the level of financial freedom.

The following guidelines will help you become one of those few traders.

4 DECIDING FACTORS

Creating and following a certain strategy will allow you to keep these 4 numbers in your target area and become a profitable trader. A successful transaction needs to know these 4 factors: risk per trading, winrate, Reward: Risk ratio, and trading frequency.

Understanding these 4 numbers will help you achieve your long-term profit goals.

RISKS PER TRADING

To be successful, you must first know how to control your risk when placing an order. A 1% risk is good advice for new traders. For example, you have a $ 10,000 account, for each trade, you are only allowed to lose $ 100.

Therefore, you should determine the stop loss so that the risk does not exceed 1%. Once we know the entry-level and the stop loss, we will calculate the trading volume (lots, shares, contracts, ...).

1% doesn't seem too big. Meanwhile, we should try to make 1.5% to 3%, which means risking $ 100 but making a return of $ 150 to $ 300, to cover the loss. If you use 1% to place the risk, when you lose 5-10 orders in a row, you won't lose too much capital. Moreover, just a few winning orders are enough to compensate for all those losses.

REWARD RATIO: RISK

R: R ratio, everyone who is a trader knows it. If you place a 1% risk, then the RR should be at least 1.5: 1. This means you have to make 1.5% of your account for each position and lose 1%.

To achieve this, your take profit target must be 1.5 times greater than the stop loss. For example, if you buy 1 stock at $ 10 and place a stop loss at $ 9.95 your take profit must be at $ 10.08. If you lose, you only lose $ 0.05 / share, and you win, you will make $ 0.08 / share.

The Reward: Risk ratio is now 0.08: 0.05 = 1.6: 1

WINRATE

Winrate is the number of winning trades out of the total number of deals. If you trade on a demo account about 100 orders and win 53 orders, your win rate is 53%. Winrate has a close relationship with the Reward: Risk ratio.

Day traders should strive to raise the winrate 50% or higher. That way, if the ratio R: R - 1.5: 1, you are already a profitable trader. That's why winrate and R: R ratio is related to trader survival.

TRADING FREQUENCY

From the data above, we know that to be a profitable trader the trader must have a win rate = 50%, and an R: R ratio of 1.5% or more comes with a risk of 1% of the account.

If you trade 1 order per day, there are 22 orders per month. If with the above rates, you will earn 11 x 1.5% - (11x1%) = 5.5% / month.

If you trade 2 orders a day, you eat 22 orders a month, lose 22 orders, multiply by the above formula, you will earn 11% per month on average.

A day trader should look for 2 to 6 tradings per day allowing you to maintain those parameters. Because there are days when you won't get any entry, there are also days with lots of signals. Therefore, to ensure transparency, it is advisable to do so.

Another thing to note, as a trader making a long life, you should not lose each order, because our win rate is 50%, so there must be a win, a reasonable R: R ratio will compensate for that number.

EPILOGUE

Trading for a living is really not easy. To earn 10% / month, you need to comply with what today's sharing has said, it is the first step for you to have the right direction, not telling you specifically how to go. That depends on the abilities and qualities of each trader. No matter which method, trading system, and how to manage capital is used, the above rules will hopefully serve as a guide for those who want to make a living by trading.

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