Have you ever thought about what the life of a day trader is like? Is it exciting or stressful? If you were given the chance to become a day trader, would you accept it or not? Well, you can answer this question later. But first, we will take a look at a typical day in the life of a day trader.
Before we say anything further, we are first going to give you a brief overview of what day trading is. By this time, people participating in the trading market already know that there are varying trading styles in the currency market. Day trading is one of them. It is mainly a short-term trading method where investors hold their positions for a short while.
Now, as a beginner, it is pretty difficult to choose which style to work with. You will have several options and each of them might look lucrative to you. After all, no trading style is bad and each of them has its perks. That’s why investors should do a deep study of trading styles to come up with the perfect one for them. For this reason, we will see the actual life of a day trader. So, without any further ado, let’s go!
Investors usually start their trading based on their time zone. Investors from the east usually get a trade in the early morning. Since all the banks and financial organizations begin their working day early, it is a time of high volatility in the market. This is high time for some trading opportunities and market analysis. Usually, the skilled traders explore the charts in the different instruments so that they can get a decent idea about potential trade setup formations.
After a trader has started their trading day, it is time for him to go hunting for trades. When the market is highly volatile it is the best time for short-term investors to trade. This is because short-term investors get the best regarding opportunities in a highly volatile market. Therefore, it is best to check the market at the beginning of the trading day and make some market assumptions. After day traders have analyzed the market for a good deal of time, it is time for them to prepare for trade execution. When a day trader prepares to enter a new trade, they make sure of various things. Some of these include:
- Quickly rehearse all their strategies and evaluate them to understand which one suits the new trade the best.
- Making sure that they are following his trading plan step by step.
- Evaluate their money management policy and be sure to have a look at their investment. It is a good habit to learn which trade to prioritize and which not to.
- Calculating the risk management and setting up risk decreasing strategies like stop loss and calculating risk to reward ratio before every trade.
- Checking the economic calendar at least once to find out if any news event are upcoming or not. In case of the advent of an economic event investors often make certain changes to their trades. Some hold on to their positions for a long time while some wait for longer to enter a trade.
- Checking out the charts and drawing the trend lines to understand the market better.
After a day trader is finished preparing for his trade, he needs to face another crucial part of the trading work. It is trade execution. Trade execution can be a bit difficult as the success rate of a trade highly depends on its execution. Sometimes exiting a trade at the wrong time could be detrimental, and holding a position could turn into a loss. This is a pretty stressful time for investors, but if it is tackled wisely, you can make a large amount of profit.
The day of a day trader ends with trade review and evaluation. It is necessary to evaluate all your trading work to find out why you are facing losing trades and winning trades so that execute better trades in the future.