Learning From Day Trading Success Stories

Several decades back, the only people able to trade round the clock in the stock market were professionals working for trading houses, brokerages, and large financial institutions. Today, things have changed. With the arrival of online trading platforms and the minute-by-minute dissemination of news, the playing field has been leveled.

Additionally, the introduction of easy-to-use trading platforms such as Audacity Capital has made it possible for investors to trade, as can be seen in many day trading success stories. A thorough analysis of these stories shows that day trading is a lucrative venture, provided you do it correctly. This is one field that has no guarantees whatsoever.

As most novices have learned, the field can be rather challenging, and there’s quite a learning curve. From what most real-life traders have to say, the surest way to improve your odds as a trader is to become conversant with the various aspects of the forex markets.

What Is Day Trading?

Day trading refers to a fast-paced form of investing where a trader gets to buy and sell stocks and securities within one trading day. Investors here seek to benefit from short-range price fluctuations in currencies, stocks, futures, options, and other readily available assets. An analysis of the day trading success stories shows that traders may need to combine multiple strategies to succeed. Top among these include:

• Momentum Trading: This is where you get to exploit short-range trends and reversals to net quick profits.
• Technical Analysis: It involves looking at past prices and trading patterns to try and predict how an asset will behave in the coming days.

Based on most success stories, day traders are primarily concerned with capturing immediate gains from market movements. This is what separates them from long-term investors whose concern lies in understanding the fundamental value of a security that they would like to purchase.

Case Studies: How Successful Day Traders Make Money

Many day trading case studies show that day traders make their money by identifying the investments and markets they wish to focus on. Once this is done, what remains is to buy and sell assets throughout the day, making sure to take positions that will provide good returns.

For example, profitable day traders typically buy stock before a major announcement pushes its prices up. They’ll then sit on the stock and wait for its prices to peak.

Popular Day Trading Strategies

When trading, you get to use a certain predetermined strategy to help you identify investments that are profitable. According to many day trading case studies, the following are the most popular trading strategies in use today.

Trading The News

A day trader needs to pay close attention to news events and announcements to profit from the ensuing market volatility. For example, many traders who have shared their real-life trading stories say that the news events to observe include a rate change from the Federal Reserve.

By trading the news, you’ll be trying to guess the direction that a certain asset will follow in response to the major news announcement. Alternatively, you may also find yourself researching assets that have yet to be repriced after the breakout news event.

Based on these day trading case studies, this strategy will work well for you if you’re able to follow the news flow for individual stocks or specific asset classes. A common approach practiced by successful traders involves trading the stocks of a publicly listed company before and after releasing its quarterly earnings report.

Leverage

Leverage is a trade execution strategy where you trade with borrowed money using margin. If the trades work in your favor, margin trading has the potential to provide you with big returns. But you also stand to lose money fast if the opposite happens. You should note that your broker will also charge you an interest on each margin loan.

Range Trading

An examination of numerous day trading case studies shows that range trading is another popular trading strategy. In range trading, your focus will be on trying to identify assets that tend to trade within a certain price range.

Your goal will be to buy the asset when its prices are closer to the lower end of the range and offload it when it gets close to the higher end of the price range. This is how you make profits as a range trader.

If you’re to use this strategy, you’ll require precise timing, as the inaccurate execution of your order could result in substantial losses. Remember, sudden market events or news announcements can cause a break in the ranges, as cautioned by many day trading case studies.

Fading

When it comes to fading, you’ll need to follow what seasoned traders call a contrarian mindset. This is where you get to sell assets whose prices have recently gone up or buy those that have been heavily sold. Anyone using this strategy will be operating based on the belief that a herd mentality can cause the prices to move too far in either direction.

Fading is one of those success strategies where the goal is to profit when the money markets overreact to an event or news announcement. For it to work, you must believe that the asset’s prices will, at some point, revert to their mean. As most day trading case studies show, this is a high-risk strategy that involves going against the trend and may thus lead to losses.

Momentum Trading

Stocks and futures are subject to general price trends. For example, if a company’s stock loses money today, it might continue to lose more money as other investors begin jumping ship. On the same breadth, a stock whose value has been on the rise could see its prices continue to gain as other investors join in.

Momentum trading requires you to have unmatched trading expertise. You need this if you’re to take advantage of past price movements to forecast future prices.

Scalping

A closer examination of the day trading case studies shows that scalping is a quicker version of range trading. With this strategy, you may buy and sell dozens of times in one day for one investment. Your goal will be to earn a small amount from each price movement. Scalpers need to observe short-range price charts to help them observe these trends.

Past Results And Expected Performance

While these strategies have been proven to work on numerous occasions, please be advised that they aren’t always guaranteed to work. You must perform an in-depth market analysis before making an investment to estimate where its prices will head next.

Benefits Of Day Trading According To Popular Day Trading Case Studies

1. Work for Yourself: There are many professional traders who make a comfortable living from day trading. If you have found a strategy that you enjoy and believe you can make work for you, there’s no reason why you shouldn’t make this your primary profession.
2. Easy Access: Modern brokerage platforms such as Audacity Capital have made it easy to trade compared to how it was in the past. You can set up a trading account using your smartphone or computer and trade from anywhere.
3. Potential for Quick Profits: All the decisions you’ll make as a trader will be informed by the need to attain certain profit targets. If all or most of your trades work out, you stand an opportunity to make more money than the average investor. But this is a big IF.
4. No Overnight Risk: The day trading case studies show that day traders generally close their trade positions before the trading day has ended. This means that they aren’t exposed to any additional losses overnight. A regular investor, on the other hand, will continue holding on to their position during this period and may lose their money if a news event were to happen at night.
5. It’s Not Boring: Day trading provides a certain level of excitement that is not available with normal buy-and-hold investing. You get to experience a rush that comes from analyzing numerous trading insights and seeing an opportunity to invest in a potentially successful trade.

Understanding That Day Trading Isn’t Ideal For Everyone

Most day traders lose all or most of their money in their first few trades, as highlighted by many day trading case studies. While there’s a small group that’s able to generate consistent profits, this often comprises people who have spent time studying the markets and creating trading plans.

If you’re to succeed as a day trader, you must be willing to apply yourself to this field in the same way that you would do if you had a full-time job. Set aside some time to undertake a case study analysis of real-life traders to help you get a better grasp of what’s expected of you as a trader.