Can you claim to be able to make $500 a day in profits from your trading? In fact how many traders you know can teach you a way to make $500 a day everyday?
I dare say not many, because if you work out the sums, $500 a day works out to $10,000 a month. The professional traders make much more than this, while the private trader who lives by trading makes around this figure per month.
It is actually not difficult to make such consistent profits at all. You will have to work hard to achieve such results of course. Here are the steps you need to take to be able to make such a sum.
Have a good money management plan. This is the crucial step, without it you can very well forget about getting any profits at all. A good money management plan consists of rules to guide leverage and margin, stop loss, profit objectives and position size.
Profit objectives are something that a lot of traders seem to have forgotten. In my classes I come across statements from students that ask why not let their profits run and try to cut their losses. My answer is this, “we are not doing a wild wild west here, allowing any from of control to escape your hands shows a severe lack of professionalism and foresight”
Not exactly a mild rebuke, but the idea of allowing a run away profit is not good financial planning. The reason for this is answered in step 2. But before we get there, remember to focus on a good money management plan. There is very resources on this but try to get as much information as possible as this is the corner stone of your trading.
In your quest to make $500 a day in trading, your focus should be on your mind. You need to attract the money to you. You need to want to profit and you need to control all emotions. How this works is that you use your brain before and after the trade. During the trade you switch it off. You use your heart before and after your trading day. During the trading day, you detach your emotions.
Now this is a tough step to master. For money management it is easier because there are tangible elements, but for psychology everything is inside of you. Psychology is concerned about discipline, emotional detachment, and the ability to handle losses and profits.
In answer to the question in money management, when you allow profits to run and not set profit objectives you set yourself up to be too emotionally involved in the trade. How many of you can say enough is enough when you see your trade making more and more money? The reality is that most will just keep in the trade and then become like gleeful school children after the trade is over.
When that happens you have “programmed” your mind to behave in this way. So when you start to lose money you will also become so attached to your trade. Then what happens is that you refuse to exit the trade. You shift your stop loss position, finally you are out of money and then you are forced to end the trade. You may think that this may never happen to you, but after 20 years of trading and teaching I can safely tell you that 100% of traders that do not have a money management plan always face this crisis.
A well crafted trading plan. This is where most traders are quite comfortable. Unfortunately there are a lot of half baked trading plans out there in the market. A good trading plan is one that covers 4 core areas. An intra day trade, a daily trade, a weekly trade and a monthly trade. There is too much information to write about it here, the blog provides a lot more information for you so pop by and visit.
How to make $500 a day in trading is to follow the above 3 steps. Just be sure to know that it is not easy. You will need time and effort to be able to reach such a figure per day. Just think that if you need 6 years of schooling to be an architect, you are considered lucky to take a year to learn how to trade properly and profitably.