Many people wonder whether one can actually make a living by day trading. The answer is, in fact, very simple. The only issue is the degree of difficulty, or risk, that one must manage. If you can manage the degree of difficulty, you can make a living by day trading.
You might say that is so simple. The rest of this article will tell you otherwise.
You can make a living by day trading if you manage the difficulty, but not the risk. Risk is what turns a day trading venture into a full-time endeavor. If you manage the risk and take reasonable profits, you can make a living by day trading.
You might also say that you manage the risk by only trading one side of the trade. You have one contract at a time. If you are doing better than average, you increase the number of contracts. If you are doing worse, you decrease the number of contracts. Your job is to try to win every single trade, even if you are only successful with a portion of the trades.
This is a strategy, not a job, and it takes skill. That doesn't mean that you need to be an outstanding trader. A casual observation of a trading room will reveal some truly terrible traders. The point is that you need to be able to function well in a trading room and trade well, and you need to understand that trading is no game.
I am not telling you you can't make a living day trading by limiting your trades and doing your job well. I am saying that is harder than it looks. A lot of effort is required.
If you are serious about making a living day trading by limiting your trades, you need to understand what risk is, what it is not, and how you can manage it. You can manage the risk by using an indicator. If you are using an indicator or have experience using one, you will know how it limits the risk. If you are trading with a stop, you need to know how to set it, where it should be, and what to do if you have a continuation from a reversal. If you are day trading, your goal is to get your profit and get out before the close. That is a risk too. Using an indicator will help you manage this risk, and you also need to understand when to take it. This is a combination of risk management using indicators and the traditional approach of entering and leaving trades when you feel like it.
You need to understand risk, and you also need to understand why so many people get into day trading so many times. This comes from good risk management management, and understanding the psychological side of trading for many people is difficult and confusing. If you can master these two concepts, and you get in a room with other traders and have someone explain their trades to you, you may be able to understand why so many people take so many risks, and ultimately, succeed. This is what you need to learn if you are serious about making a living day trading.