Weekly Recap: My First Week of Day Trading

This week marked the beginning of my day trading journey with a small account, and it was a rollercoaster of emotions!

To start, I’m currently using a simulator to test my trading strategies before risking real money. If you’re new to trading, I highly recommend this approach. Over the last two days since I started on Thursday, my gains have been decent, and I ended the week on a positive note.

When I transition to real trading, I’ll be using a $1,000 cash account, which is what I’m simulating now. One limitation of the simulator is that it allows for more frequent trades than I’ll be able to make with a cash account, where funds take a day to become available again after a sale. While I’ve taken many trades per day on the simulator, I’ll realistically be able to take only 1-3 trades per day with my real account.

Despite this, trading on the simulator has been incredibly valuable and a great learning experience. I plan to continue using it for another week. Here are some key lessons I learned during my first week:

1. Patience is Crucial: Rushing into trades often led to losses. Waiting for the right setup is worth it. While your profits might be smaller, your risk is significantly reduced.
2. Profit Loss Ratio: I’ve been aiming for a 2:1 profit/loss ratio. This means if you’re risking $20 on a trade, you should be aiming for a profit of $40.
3. Risk Management: A solid risk management plan is essential to minimize losses. I’ve been following the 2% rule, which means risking only up to 2% of my account balance per trade. For a $1,000 account, this translates to risking up to $20 per trade.
4. Keep Emotions in Check: Emotional trading often led to poor decisions. I’m working on staying calm and sticking to my plan.
5. Continuous Learning: The market is a constant teacher. I’m dedicating time each day to study and improve my strategies.

Stay tuned as I continue to document my progress, share insights, and work towards becoming a successful day trader!