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Selecting the Right Day Trading System to Make Money

Selecting the Right Day Trading System to Make Money

Watch out! How to avoid the “get rich quick” Day Trading systems

The main problem with the majority of beginner day traders is that they have no focus. One day they are focusing on one system, and the next day they are focused on another one.

Not surprisingly, this leads to very little consistency and zero profits in their account. As any successful trader will tell you, the biggest secret of making more money than you can count, is to find one day trading system that you feel comfortable with and then stick with it.

At the end of the day, there are hundreds of day trading systems out there, and trying to learn all of them will simply result in information overload and a sense of overwhelm.

In order to find the right system, you should spend some time at first analysing the different ones available. Then, when you find one that just feels right, commit to spending all of your time on just that one system for at least 30 days.

At the end of that 30 days you can assess your progress, and decide if you should continue with the system or find a new one. If a day trading system is profitable then you should stick with it, and just conduct tweaks to improve your overall results.

Here are some tips to help you find the right day trading system so you can make money in the markets.

Consistent profits is key

All that glitters is not necessarily gold, and this is definitely true when it comes to day trading systems. Many newbie traders are typically drawn to the systems and strategies which promise the big profits over night, kind of like winning the lottery.

While it is possible to make big profits fast in day trading, it is highly unlikely this will happen for somebody new to the markets. Instead, it is much more profitable in the long run to seek out a day trading system that has a smooth equity curve, and is more focused on producing small profits over an extended period of time.

With these kind of systems, not only are you more likely to actually make money, but you also reduce your amount of risk, so the chances of going bankrupt are slim.

Operating with less risk is also better for your state of mind. Many people who follow systems that are risky end up becoming an emotional wreck. They find it hard to sleep and are constantly worrying about losing money. This leads to making rash decisions based on emotions, which is the number one way that the majority of day traders lose money in the markets.

Don’t be one of them, and instead focus on small profits on a consistent basis.

Make it easy

Have you ever tried to learn about a new day trading system, only to feel like your brain was about to explode because it was just too damn complicated? This is another mistake that many traders make, as they often equate complicated to meaning better.

Actually, nothing could be further from the truth, and as any successful day trader will tell you, the real profits are in keeping it easy and simple.

At the end of the day, the markets are extremely volatile, and it can only take a few seconds for things to change drastically. With this in mind, do you honestly think it is a good idea to trade in this kind of environment with a system that is based on complicated formulas and a million different moving parts? Of course not.

Because everything happens so fast in the world of day trading, you need a system which allows you to make quick decisions on the spot, and this can only be achieved if you strive to keep things as easy and simple as possible.

In fact, your day trading system should be so easy that you can work out what trades you are going to make today using nothing more than a writing pad and a calculator.

Trading frequency

Trading frequency

Any successful trader knows that the more often you trade, the more chance you have of being profitable. That’s why it’s a good idea to choose a day trading system which generates multiple trades every single day, and not one where you have to rely on only a few trades a month.

The reason for this is simple: in order to get good at anything, you need to get plenty of experience under your belt, which can’t be done if you are not trading on a frequent basis.

Also, if the average win percentage of your system is 65%, and you are only trading a few times a month, then it is possible to go months at a time without generating any profits.

However, when you are trading every day with this kind of win percentage, then you will see profits much more frequently, which will give you the confidence to keep going through the bad times because you know that a winning streak is just around the corner.

Another reason why it’s important to find a day trading system with a high trading frequency is because you always learn more from your mistakes. In order to grow as a day trader, you need to be making mistakes on an almost daily basis, and it would be impossible to do this if you were only making trades now and again.

The final word

A good day trading system will always allow you to start small and grow your business from there. Be extremely weary of any system that requires large capital from the beginning, and promises overnight riches. There are no such certainties in the world of day trading, as the markets are changing all the time.

To risk a huge amount of money if you are a beginner is not a very wise choice, and will ultimately lead to frustration and anger. Trading should always be approached with a calm mind and a level head, and it’s much easier to do this with a day trading system that has a long term vision.