I have been “investing” for the better part of a decade. I’ve been buying blue chip stocks and index funds with consistent 3-5% returns year over year. But I never found that exciting or had any real passion behind doing it. I simply was doing it to secure a better long-term financial future for my family. That’s what big institutions and the trained “financial advisers” are spoon feeding me. But then, a pandemic happened and got started day trading.
Like many around the world, Covid-19 has drastically changed my life. The abrupt cessation of office-based work was a jolt to my system. Warning alarms went off in my head about a secure future. After recently having my first child, I’ve become something of a risk-adverse individual. I tend to play it safe and keep my finances in good order.
While I was one of the fortunate ones not to lose my job, a desire to add some stability into back into my life with something that I could personally control became insatiable. Simultaneously, a good friend of mine was humble bragging about how he made $6,000 in one day through day trading. That’s when it clicked:
I want to get started day trading! But how?
Like most who learn about how to get started day trading, I was lured in by the industry pyramid-scheme-esque egos who promise that if you just buy their course, or subscribe to their service, you too can turn $100 into $100M in no time! I mean, who isn’t excited by the idea of working 3-4 hours a day, 4-5 days a week from wherever you want in the world and making enough money to support your family?!
But after I lost $300 on my very first day trade – I knew it was time to get serious. My risk adverse personality kicked into gear and my more rational side took over. And after my first loss, I didn’t day trade again for another 3 months.
Time to Get Serious
I spent those three months absorbing as much information and instruction as I possibly could about How to Start Day Trading. I read blogs (like this one!) and watched youtube explainer videos on all basics of day trading. Learning about all the different Day Trading Strategies and identifying the ones that I liked helped a ton. I downloaded TD Ameritrade Think or Swim platform and practiced charting and identifying patters. Using paper trading, I tested out my strategies and worked really hard to understand why the entries/exits I made were either good or bad.
I treated learning about how to get started day trading like a second job, because for me, it was a second job. My corporate job is too strenuous to be able to do these things during work hours. Not to mention doing so would be unethical. So I spent nights and weekends devoted to the task at hand.
When I finally felt confident again, I hopped back into the stream, but this time I started with only $300. My main focus was on the percentage gains and not the dollar gains. In fact, I customized my portfolio view page to not even show the dollar gains.
For me, this was how I could best control my outcomes, and followed the motto of “Win Big, Lose Small” to set Stop Losses and Trailing Stops like it was my job.
Fast Forward To The Now
As I look back, I almost kick myself for that first trade where I lost $300 – because had I known then what I know now, that was such a horrendous trade that I would have never entered. But the other part of me appreciates that – because without it, I don’t know that I would have had the personal catalyst to dig deep and learn the things I needed to in order to find a style of trading that works for me and fits into my daily schedule as a second source of income.
Look, bottom line is – the stock market is not a get-quick-rich scheme and even though you may get lucky gambling on some stocks in the short-term, if you don’t dedicate yourself to learning about the instruments with which you are playing – at the end of the day, you will end up burned.
Happy Trading, and as always, take profits into strength!