1. Examine your goals and constraints


Before you invest time in creating or learning and then practicing day trading strategies, consider your goals and constraints:
  • Do you have enough capital to do day trading? If not, wait until you have enough capital. In the meantime, you can continue to practice your strategy.
  • For a consistent return on practicing only a few hours a day, it will take you from 6 months to 1 year. It will take longer if you practice intermittently. Are you willing to spend that time?
  • Once you have a real trade, can you commit to only trade 2-3 hours a day with other work commitments?
  • You shouldn't quit your job until profit from trading replaces your income. So, with other commitments, what time of the day can you trade? Is your strategy designed for that time of day? Your strategy needs to be tailored to your life.
  • Are you day trading because you want to quit your job? You may have to trade for a year or so to come to a time when you can replace your earnings with day trading.
Consider all of these questions before deciding to invest a lot of time or money in learning how to day trading.

2. Understand minimum capital requirements


Capital to a day trader is like inventory to a store owner. You need it to make things work, and how much you have - how you manage it - determines your income.
  • Stocks: To start trading stocks (US) legally you will need a capital of $ 25,000. To give yourself a night out, deposit a minimum of $ 30,000. If you enter and exit stock positions on the same day for less than $ 25,000, your account will be flagged and you risk losing your trading privileges.
  • Futures: For futures, start with at least $ 2,500. but $ 7,500-10,000 is better. Some contracts have a higher transaction cost than others, but if you plan to trade the regular E-mini S&P 500 contract then that range of capital will suffice.
Important: With these recommended deposits, earning income is possible, but not easy!

3. Create or follow a strategy


Day trading is not something you do to your liking. It requires the right approach and is rehearsed over and over to give you a statistical advantage on every trade you make.

Ask yourself these questions at the start by looking at the live chart:
  • How will you enter into the trading?
  • How will you exit (for both winning and losing trades)?
  • How much risk would you take when trading and how would you choose the size of the position (how many stocks, how many currencies, or futures)?
  • After deciding all of this, what is the likelihood of a profitable trade? And if you did the same types of trades 100 times, what trend would your strategy show?
The only way to answer these questions is to repeat the same method over and over and track the results.

You can create a strategy by finding trends in the daily price action of the asset, or you can learn the strategy from others.

4. Practice a lot


The practice is extremely important in day trading. Even at a minimum-wage job, the boss will often ask you to practice what you have to do before getting into the real job.

With thousands of hard-earned dollars at stake, training is paramount. However, new-day traders rarely practice.

To get started, practice on the demo account before you risk real money. What you will see is that no two trades are exactly the same. Today the market can be extremely volatile, while tomorrow it is quiet. Today the market is trending, while tomorrow it is moving sideways.

If you don't practice, you may miss out on trading signals or tend to execute trades that are not part of your strategy.

Just practice the strategy you're researching. Know it well and perfect it. Once you come under additional pressure to trade real money, you won't have to think about whether or not to trade.

Epilogue

Day trading is risky and quite stressful. Before you decide to move on to this job, consider your motives and circumstances carefully, consider your capital requirements, decide on a strategy, and then practice, practice, and practice.

Only after you have been able to monetize a demo account for a few months should you consider opening a real account. Then you can take the next essential steps you need to take to become a true day trader!