You know, day trading as a career, hobby, profession, or even avenue of trading equities, is wrapped in shrouds of skepticism.
I personally love day trading and I’ve been doing it for years. When I tell people that I am a professional day trader, they immediately say, “Really? Wow! That’s so risky, isn’t it?” Honestly, no. It’s really not.
Here are 5 of the biggest day trading myths.
- It’s extremely risky and you will lose everything. Honestly, day trading is like any other type of trading. Either you know how to manage risk, or you don’t. Here’s an article I wrote on just that topic. I actually like the limited risk of day trading, because I don’t have to hold a position overnight. I can be in all cash, and wild events or news, like Brexit, will not affect my positions. Traders, it’s all about knowing how to manage risk. Everything in this world has inherent risks. You just have to know how to mitigate potential risk.
- You have to be very good at math. Nope. I am terrible at math. A good calculator or maybe an excel sheet to do some very simple calculations is about all the math you will really need. The only math I do on a daily basis for trading is determining my position size based on my risk. How do I do that? (It’s in the article above)
- You have to be by your computer all day. Nope! Also not true. You can day trade as much or as little as you want (I suggest the little part). There are certain strategies and setups for any and all parts of the day. Plus, most brokers have the ability to create automatic orders which can trigger you in and out of winning or losing positions without you even being at the computer! I love that part.
- You have to have a huge bankroll. Also not entirely a fact. I actually suggest if learning how to day trade, start with a very small account, with just about $3,000. Need to know how to day trade with only $3,000? Read this.
- It’s impossible to make money day trading. Believe it or not, this is one popular myth. People think day trading is often just a money pit. Day trading is simple, but hard. It’s not impossible. The easy part is simply to buy low and sell high. The hard part is sticking to your trading plan and staying the course on each and every single trade, each and every single day.
I hope this shines some light on day trading myths! If you have any questions, feel free to email me at jerremy@reallifetrading.com. Until next time friends, remember – love life, live life, and trade it!
