If you’re looking to become a proficient trader and achieve financial independence, or just build a secondary source of income, learning how to day trade is a great way to do it. I’ve helped countless students in my trading mentorship program get started with day trading, get funded, and get payouts from several different prop firms.

What is Day Trading Anyway?

Day trading is simply the act of buying and selling an asset, stock, or currency within a single day, also known as ‘intraday’ trading. In other words, day trading generally involves short-term trades that are only active for the day that they are placed, whereas ‘intraday’ trading (also known as swing trading or position trading), involves holding positions overnight, or for multiple days, weeks, or even months. 

Day trading is typically extremely enticing for many beginner traders, as it offers the potential to make massive profits from the comfort of your home, potentially hundreds, thousands, or even tens of thousands of dollars per day, even on a single position. There is also a misconception that more trades = more profit, but that normally isn’t the case.

The truth of the matter is, day trading isn’t easy, and it takes a lot of discipline, knowledge, and in-depth understanding of a proven, profitable strategy to become a successful day trader. 

This guide is meant to be for those who already have some trading experience, but who want to build their skills up to become a proficient day trader with the ability to generate a consistent return in the market, no matter what trading instrument they choose.

This guide is going to provide you with all of the high-level information you need to become a successful and profitable day trader. So, let’s start by discussing whether day trading is right for you…

Is Day Trading Right for You?

Before you actually dedicate yourself to day trading, you need to consider whether or not it’s the right move for you, as there are many challenges that you’ll likely face trying to do it.

It’s important to understand that while some traders make it look effortless, successful day traders have the experience and discipline to follow a tested trading strategy to the tee without deviating from their trading plans. Learning how to day trade isn’t just a side hobby you pick up and get good at with minimal effort. 

Setting Expectations: Understanding the Lifestyle of A Day Trader

Something that beginners need to understand, something I wish that I knew when I first started, is that day trading isn't a quick path to getting rich. The truth is that nothing is. With the exception of getting lucky, no business is that easy. It takes time to build up the skills you’ll need to be able to turn a consistent profit out of your trading, and more likely than not, you’ll actually lose money when starting out.

Day trading is an activity that requires your undivided attention when looking for trade setups, which means keeping your charts open during regular market hours, and making use of alerts to stalk price action before going in on a trade setup that hits all the marks of a valid setup.

I've spent countless days (and nights when I used to trade London session) sitting in front of my computer screen, analyzing the charts, and the strategy I teach inside of The Advisory. 

While trading might be extremely stressful at first, especially when you first start placing trades with something on the line–whether it’s your own money, or a prop firm challenge fee, I promise that those negative feelings, and what you think you lack in the trading psychology department will all dissolve with the right trading strategy.

Remember however, that learning to trade is a commitment. It's not just a time commitment, but also a mental and emotional commitment. You have to have a strong mindset to be a successful trader, because you’ll need to be able to deal with temporary setbacks.

Are You Financially Prepared To Become A Day Trader?

Before you start day trading, having a strong financial safety net is important. When I started out trading, I owned my own IT consultancy and had a stable source of income to support myself and my family. Truthfully, I’d never recommend that someone just quits their job and dives into day trading, as the pressure to perform will almost always get to them and potentially cause them to trade emotionally.

If you want to get into day trading full-time, I suggest proving you can turn a profit for at least 1-2 years while maintaining another source of income to support yourself financially, before you go and transition into a full-time trader.

Not only that but I’d suggest also saving up at least 1-2 year's worth of money to cover all your living expenses. Having a rainy-day fund gives you a bit of a cushion so you don't feel as much pressure to perform when having a break-even or losing month.

Developing a Solid Trading Plan

Starting day trading involves developing a solid trading plan around a proven strategy that others have used to make consistent profits in the market with. Emphasis on proven strategy. It took me several years of collecting data and analyzing how and why price action moves on certain instruments to develop a strategy that’s easy to understand, execute and has a healthy strike-rate above 50%.

The Break and Retest Strategy

As far as day trading strategies go, a break and retest strategy is more than ideal for beginners because it allows them to capitalize on clear direction and momentum in the market. Break and retest strategies are by virtue of their name, continuation trading strategies. Although it’s very simple to understand and employ in the market, it's still one of my favorites, which is why I still use it to this day. It just works.

It's easy because all you have to do is identify key levels where asset prices break through previous supply or demand levels and then retest before price continues in the direction of the breakout.

Trading continuations this way is super straightforward because all you have to do is enter the market as it’s retesting, which gives all of the trades you enter a much higher probability of moving in your favor. While this is a very elementary way of explaining how I trade, I explain it in much greater depth and detail the Blackwatch Advisory program.

The Front Leg Theory

One of the most important aspects of day trading is price action, and if you're going to attempt to understand price action–even on the most basic level, then the front leg theory is a great way to keep a pulse on what price action is doing. Specifically, the front leg of price action is just the most recent movement in price. 

Generally speaking, the most recent price movements are also the most relevant. If you focus on the front leg, it becomes much easier to get a feel for the current market’s momentum and to trade with confidence. 

KISS: Keep It Simple, Stupid!

Something else I often see beginner day traders struggle is strategy hopping. You might even be guilty of it. Traders will try a strategy out, lose money, then hop to the next one over and over again. 

A lot of times, you can’t even blame them because it’s possible they were trading a strategy that legitimately had no business being taught to them in the first place. 

They were trading a strategy that just doesn’t work, so they either give up on it, or even worse they stick to it and either deviate from the strategy or start adding things like indicators or new concepts to it in an attempt to optimize it and turn it into a profitable one.

If you catch yourself constantly trying out new strategies, or adding more and more indicators, concepts, or you’re constantly modifying your trading rules, you may be overcomplicating things to your detriment. The first step to breaking out of this is being aware of it, and looking for a strategy that has actually made other traders profitable… and I’m not just talking about them passing a challenge once or twice on a fluke, look for a strategy that produces traders who make consistent profits and/or profits from prop firms.

Mastering Risk Management As A Day Trader

Although the day trading strategy you choose at the end of the day is probably the most critical decision you have to make, managing your risk properly is equally important. This is why there is always so much emphasis on setting risk rules before you even think about placing your first trade.

If you don't have a good risk management plan in place, even the world's best trading strategy is bound to fail. Therefore, you need to define what your risk tolerance is, and stick to it at all costs, because it’s literally the thing standing between you and obliterating your trading account(s).

Defining Your Risk Per Trade As A Day Trader

As mentioned above, you need to define your risk tolerance. This means that you need to determine how much money you are willing to spend on a trade, and moreover, how much money you're willing to lose.

Generally speaking, you shouldn't risk more than 1% of your trading account on a trade, and if you're a real beginner, no more than 0.5%. This way, even if your trade loses, you won’t feel the pressure from a loss as much, and you’ll double the number of losing trades you can sustain before blowing that prop firm challenge or even your personal account.

Managing Position Size

Another essential aspect of day trading is managing your position size. For those who don't know, your position size is simply your lot size (in forex), contracts (for trading futures), or shares (for stocks or ETFs) in a position. The size of the position you take is directly related to your risk tolerance.

This means that you need to consider stop loss levels, with your stop loss being defined as the amount of money that you can afford to lose if the trade doesn't go your way. With a proper position size, you can make sure that your trading account isn't significantly impacted by a single loss to the point where it gets blown.

The Role of Stop-Losses in Day Trading

Speaking of stop losses, this is one of the best tools in a traders arsenal to stop you from losing too much money in the event that a trade goes south. You need to place your stop loss levels at the appropriate price points to protect your account. That means no extremely tight stop losses, because inevitably you’ll just end up hurting your overall win-rate in the long term on trades that will stop you out then run into profit.

This means moving your stop-loss in a way that will cause you to lose more money than you originally risked on the trade is strictly against the rules. And it goes without saying, trading without a stop-loss is a big no-no.

The Mindset of A Profitable Day Trader

Although trading a proven profitable strategy is important, so is your mindset. If you believe you’re never going to become a profitable trader, you’re probably right. If you don't have the right mindset, no amount of “knowledge” will bring success in day trading. 

A big problem is that many people let their emotions get the best of them and self-sabotage because they actually don’t believe it’s possible. Sometimes it’s subtle things like deviating or trying to optimize an already profitably trading strategy. Sometimes it’s gambling because you’re putting too much pressure on yourself, or you’re feeling pressure from family, friends, or your significant other to make money with trading.

Developing Emotional Discipline As A Day Trader

If you can't neutralize your emotions, then day trading is going to be a difficult endeavor for you. Markets are inherently unpredictable. Emotions like fear, greed, excitement and anger can all negatively impact your trading decisions if you don’t keep them in check.

What this means is that you end up making trading decisions based on how you feel in the moment rather than just sticking to the playbook.

More often than not, these kinds of split-second and irrational trading decisions lead to big losses. For this reason, it's essential that you create a set of rules that you'll follow no matter what happens, and if you have this bad habit, it’s important to cut it out now before you reinforce these self-destructive behaviors and work against yourself.

Learning from Losses

Something that I tell all of my students is that losing money in trading is inevitable, or in other words, you will take some losses. That's just the way probability works. But, remember that losing a few trades now doesn't mean that you can't or won’t have success in the long term. Becoming a proficient trader is a process that requires consistent effort on all fronts discussed in this article.

And remember, your losses aren't necessarily failures. Sometimes they’re completely legitimate losses that you can expect to take even though you followed the strategy to a tee. Or they’re simply valuable opportunities to learn from trading errors or mistakes you made because of hastily analyzed charts, or because you were too eager or hesitant to get into the market. Speaking from personal experience, some of my biggest breakthroughs have come at the hands of some of my biggest losses, including the time I left a trade on through NFP by complete accident and blew a prop firm account. 

Creating A Day Trading Routine

Something that I find really helps me day trade with confidence and consistency is creating a trading routine. Just like any other part of life, us humans tend to do much better when we have a solid routine in place, and this starts with some preparation before diving into trades.

Pre-Market Preparation

Never start trading without doing your chart analysis. Set your hard rules for individual trading sessions, identify the market direction, figure out what conditions price action needs to meet for the day in order to enter the market so you’re not just forcing trades. With the strategy I teach in the Advisory program, this is super simple.

It's all about having a clear trading plan in place before the market even opens. Remember to check for economic data releases or big news releases that may impact the markets.

Staying Just Focused Enough During the Trading Day

Although sometimes I get distracted when my kids are home for the summer, or I’m distracted by some of my other business or work obligations, I always do my best to stay as focused as possible during the trading session by making heavy use of alerts in TradingView. 

Remember, the market is going to move whether you’re paying attention to it or not, and even the smallest distraction can lead to missed opportunities, which for some can devolve into trying to chase a move that’s already long gone.

With that said, it's impossible to be glued to your computer screen 100% of the time, and in fact this can be a recipe for trading out of boredom for newer traders. Again, this is why I use alerts, so that I’m only engaging with the market when it’s setting up in a way that fits what I’m looking for.

While I don’t get tempted to enter invalid trade setups like some traders do, I know it’s a common problem so again I suggest getting used to using the alerts function in whatever charting software you use to analyze the markets with.

Post-Trading-Day Review

When the day is over, you should do a post-trading-day review. You should analyze your trades to see what worked and what didn't, and more importantly… why. This is why keeping a trading journal is so important, so you make a conscious effort to be aware of the good and bad things you’re doing in the trading session.

The Work Doesn’t Just Stop Once You Become A Profitable Trader

Every moment in the market is unique, and while it exhibits patterns which I’ve used to develop a profitable trading strategy with, no single moment in the market is the same. The work doesn’t stop once you build a profitable trading track record out. Just like hitting the gym, you can’t expect to keep the muscle you built if you stop working out.

Reflecting on Your Trades

As mentioned above, part of being a successful trader means you review and reflect on your trades. By reviewing both your successes and losses, you can determine what bad habits are hindering your trading, and which good habits you need to keep doing.

The Road to Consistent Profitability As A Day Trader

Before we wrap things up, let me leave you with a few more pieces of advice so you can go on your way to becoming an actual day trader and start developing your career.

The Role of Patience and Persistence

If you suffer from losses at the start (which you likely will) and you're not quite sure what you're doing, be patient and keep persisting. This is why I suggest practicing in sim, and proving yourself on a demo account first before trying to trade with live money, or even doing a prop firm challenge.

The fact is that just like Rome wasn't built in a day, neither is your acumen as a day trader. For that matter, it took me several years and hard lessons to actually get this good at day trading.

Building Confidence Over Time

The bottom line is that the only way to become a successful day trader is by consistently trading. There is no other way to build up your experience or trading skills besides taking action.

Much like learning to drive a car for the first time, you won’t get good at it by just reading a book. You need to get into the driver's seat and actually build the skill with direct experience.

Conclusion

The bottom line is that although day trading isn’t easy, there is great potential for anyone to become a proficient, profitable day trader. As long as you have the right trading strategy in place, work on your trading habits (developing good ones, and breaking bad ones), there is a very real possibility that you’ll make a trading career out of this.

As someone who's been trading for many years, something I can tell you is that becoming a pro day trader is nearly impossible without the right strategy, so again I urge you to do your own research and find a place to learn how to trade that has real proof of producing consistent and profitable traders.