It's true that someone making 2 points every day can become an incredibly profitable trader.  Nobody is doubting that on its initial face value.  If you can make 2 points per day with one contract you're doing fine but if you can make 2 points per day every day with 10 contracts you're making a very substantial income and there's no reason you can't ramp up the position size from there.  In the Emini S&P 500 a trader can regularly trade 20, 50 or even more contracts with ease.

The issue is that when our focus narrows to the outcome of a single day or even the outcome of a single trade it can actually make long-term profitability that much more difficult to achieve.  Let's take a look at why that can be the case.

Not Every Trading Day is the Same

Making just a couple points while day trading Emini S&P 500 futures isn't actually all that difficult.  Often you can pull that kind of profit out in a half hour or less.   The difficulty is in actually keeping it and, more importantly, regularly exceeding it to balance out those days with less than stellar results.

The reality of trading is that every day is different and some days are certainly better than others.  There's plenty of days where you can make a couple of points quickly but there are some that start slow with limited action where it takes a bit more time to find the trades that fit your trading plan or other days where the market enters into a whipsaw period that can cause a loss or two.

While veteran traders who are able to trade the full morning can realistically make profit nearly every day in spite of these conditions there are those who have a more limited trading window or market novices that will have break-even or losing days (though such losses should be kept small thanks to firm limits on overall risk).

Due to this it's important to realize two things.  First, that a trader should generally have a longer term outlook on their trading.  If you focus on "making just 2 points per day" it tends to put a lot of emotional weight into the outcome of every trade.  Suddenly every trade carries more importance and the emotional burden on a trader can significantly increase thanks to just a single trade possibly meaning daily success or failure.  This extra emotion added to the trading process rarely leads to more profitable outcomes.

As traders we must understand that our trading edge needs some time to play out even if our overall trading expectancy is very strong.  The outcome of a single trade or even a single day doesn't determine much.  What matters is following our plan, taking good trades that fit our rules, and letting our edge play out over a larger sample of trades.  This is why I have the day traders in the STA Training Program focus on weekly and monthly results while considering their edge over samples of at least 20 trades.

Second, outlier trading days that offer far more profit potential than the average are essentially the "keys to the castle" when it comes to extreme profitability.  You can still be profitable without them but taking advantage of the one or two days with high potential during the week often means the difference between decent weekly results and exceptional ones.

You can do all right by setting an artificial 2 point limit on your daily profit but some days offer far, far more.  Take Thursday for example, a day that had numerous high quality market swings and plenty of profit potential as you can see in my charts.  If you only came out of a day like that with a tiny 2 point profit you're severely limiting your overall profitability and potential!

Keep Playing When The Deck is Stacked in Your Favor

This is why I will always continue to trade for longer than my normal 2 hours or so on a given day if the market is moving exceedingly well and trading outcomes are highly predictable.  It's not about being greedy or trying to hit some specific dollar figure for the day - it's about taking one good trade after another and continuing to do so if the market is offering the opportunity.

There's plenty of days where I might just trade for an hour to pick up some points and call it a day if the market isn't moving particularly well.  There are times when other activities call me away after only a short period of trading.  However, when the market is moving well, the setups are excellent, and the trading outcomes are consistently in your favor then it's usually best to trade until those conditions change.

Sure, I could have had my 2 points after the first three trades on Thursday and called it a day in about 15 minutes but look at all the potential opportunities I would have missed on a day of exceptional price movement.  Considering it turned out to be the most profitable day of the year so far for myself and many STA traders it's a good thing we didn't pack things in!

If the market is doing its part to put the numbers firmly in your favor then don't let the opportunity pass without taking advantage - strike while the iron is hot!

The post Strike While The Iron is Hot appeared first on Samurai Trading Academy.

Why not?  Because it seems like it will probably take a lot of hard work, has some risk of not working out, and for most it means entering uncharted professional territory far outside their comfort zone.  The thing is, they're right!

It does take effort and plenty of determination to become a day trader, but in my opinion nothing could be more worthwhile.

I've been thinking about this a lot lately after embarking on my latest adventure thanks to the incredible flexibility my profession provides me.  I've recently arrived in Thailand where I will be spending the next four months trading, teaching through Samurai Trading Academy, and exploring this amazing country and some of the surrounding ones too.  For me, this epitomizes the kind of professional freedom that got me into day trading in the first place.

Of course, I didn't always have the freedom to travel to different countries for extended periods of time without worries of getting back to my “normal job”.  It only came about because I made a clear decision about what was important to me and then took the difficult steps to get where I wanted to be.  It wasn't easy, but nothing truly worth doing ever is.

When I first made the decision that I wanted to become a full time trader it had little to do with an initial passion for the markets.  I had always been interested in stocks since being introduced to them in a classroom stock portfolio exercise many years before, but I had yet to really dig into what active trading was all about.

So how did I come to the conclusion that I should spend months or maybe even years completely dedicated to developing my skills in the markets?  It was all about identifying what really mattered to me, where my passions lied, and envisioning where I wanted to be in the future.

Realizing What's Important

At the time of my major career decision to become a day trader I had been doing consulting work in the US over a couple of different states.  I enjoyed the work as I was helping others to build their businesses from the ground up, but there were some things I definitely didn't find as appealing.

For one, I was always on my way to the next meeting as I drove or flew from place to place.  My time was scheduled to the minute to fit in as much as possible with people spread out in numerous cities and towns.  Worse, what little personal time I had was often interrupted by phone calls from those I was working with or messages that urgently needed to be returned.

It didn't take long to realize that this wasn't a good plan for long-term happiness.  All of it made me feel that I was spread "too thin", with little time to enjoy the things that were important to me.

It was at this point that I realized I needed to make a change.  I had to figure out what truly mattered for my quality of life and I needed to map out a plan to improve it.

After a period of introspection, I came to the conclusion that what truly mattered to me was having complete career freedom.  I wanted to be able to schedule my own hours and more importantly I needed to have the ability to take a day or even a week off on a whim.  I didn't want employees or customers that I would need to manage my time around.  Most of all, I wanted to be able to work from anywhere in the world so I could exercise my passion for travel.

Achieving this sort of career independence was a lofty goal, no doubt, but I knew it was extremely worthy of my time and effort.

Deciding to Become a Day Trader

In the following weeks I considered many career options and eventually decided that learning how to become a day trader would fit the criteria perfectly.  I already had some interest in the field as I mentioned and it fit my general background in commerce well.  It had minimal start-up costs, offered a work day I could set myself, and would give me complete location freedom.

Simply put, day trading fit my career and lifestyle goals exactly.  What started as a logical decision to become a day trader soon ignited an intense passion for the markets that continues to this day.

Keeping on the Path of the Samurai Trader

It's perhaps interesting to note that, for me, choosing to become a trader was never about the money.  I didn't care if I made millions because I knew that my freedom would be worth far more.  I think that’s an important distinction because for many people the initial reason they become interested in trading is purely for rapid financial gain.

The trouble is that for most of us, this kind of financial focus isn't a sustainable passion over the long term as it usually provides little if any real fulfilment.

I've come to believe that it's vital to identify your true motivations and underlying passions before you enter the trading arena if you want to reach your goals.  

Do you want to be free of the typical career path?  Is spending more time with your family what drives you?  Do you have an intense desire to travel and experience other cultures?  These motivations are easy to sustain over the longer term compared to those that are purely financial with no underlying emotional drive.

Having these motivations is what has allowed me to develop as a trader and has kept me on the Path to trading success for many years.  My experience training others has been similar - those with a desire beyond their financial bottom line are the ones who end up finding the greatest rewards.

Without true passion and a white hot desire to achieve your goals, it will always be difficult to bring forth the effort and focus  needed to become a successful trader.  You must take the time to consider what truly matters to you before embarking on your trading journey, then take calculated steps to get to your destination.

The Path of the Samurai Trader is not an easy one and is fraught with various perils, but those with full knowledge of their underlying passions are the ones that persevere and reach their trading and lifestyle goals.

The post My Decision to Become a Day Trader appeared first on Samurai Trading Academy.

Day Trading for Work, or for Freedom?

One of my main goals when starting Samurai Trading Academy and our day trading blog was not just to focus on the handful of traders in the STA Training Program, but to put together a high quality resource for everyone with interest in day trading for a living and the freedom it provides.  While some people jump straight into the big trading firms, this isn't really the audience I'm focused on.  There are certainly some advantages in terms of the size you can trade and the trading costs involved, but is it really worth working 14 hour days at a desk in an extremely high pressure environment?  That's certainly not the reason I got into trading, and I'm confident that many of you feel the same way.

No, for me it's all about freedom.  Freedom to trade from where I want and when I want to, simply for the enjoyment I get from it.  

I have a passion for trading and I do it because it's what I love to do, not because it's my job where I need to grind out hours.  Then if I don't feel like trading longer than an hour in the morning, or I want to take a four day weekend?  Just do it.  Want to travel from country to country for a few months and trade along the way?  No problem.

That sort of flexibility is something that has immeasurable value to me and there are many people out there that I know value it as well.  It's for that reason that I wanted to put together a site where those who hold a similar passion for the markets and the lifestyle it can provide could come together and build their trading skills.  In the coming months I will most likely be doing a fair bit of travel, so there will definitely be some blog focus on the lifestyle of being a travelling trader along with some of the difficult issues you can run into as well.

Taking the Trading Business Seriously

Even though there some great advantages to being a full time trader, I also think it's important that we are honest about day trading and what it involves.  Unfortunately, as anyone can tell you who has been around the day trading game for a while, the state of education in the industry is rather poor and it sometimes seems few are honest about what it really involves.  Trading isn't easy, there's no "Holy Grail" out there with 99.9% wins and no risk, and because trading is a skill like any other it can take some time to develop.

I believe that it's best to just give the hard truth about day trading because it very quickly tells you who is serious about this business.  If someone isn't willing to put at least a solid effort towards their trading goals then they'll never achieve them, so if those people get scared away by a bit of truth then it just saves time for the rest who are committed to being successful day traders.  If you're one of those people, then STA was built with you in mind.

The Future of the STA Day Trading Blog

Moving forward, I greatly encourage you to join in what we are doing here at Samurai Trading Academy.  Leave feedback here or on our Facebook page, join the STA Newsletter (in the right sidebar of this page) for the exclusive (and free) education and training videos I will be sending out, and if there's content you are interested in seeing on our blog then by all means suggest it!  This is a day trading blog for traders, by traders, so it's all about providing you the kind of content that will help you reach your trading goals.

To help accomplish this, in the coming months I plan to put extra focus on some of the extremely important aspects of our business that so many aspiring traders ignore, like money management, dealing with risk, the emotions of trading, and much more.  These trading topics  are what being a consistently profitable day trader is all about. far more than indicators, systems, or charts full of fancy lines and colors.  I'll be happy to share with you whatever experience I can to help you get where you want to be as a day trader.

Growth of Our Trading Community

Meanwhile, things continue to move ahead in the STA Training Program and it's a very exciting time.  We have new traders coming into the ranks this month and it will be great to see where their development takes them.  At STA, we all have our own goals and trading ambitions, but it's also about community.  It's about working with other like-minded people who share you passions and collaborating with one another so we can all improve.

The wonderful thing about trading is that even when we follow the same general approach with our systems, we all see the market with a unique perspective.  Small things that may not be noticeable to some are glaring signals to others.  Even the newest traders can teach someone with dozens of years of experience, because their fresh vision of the markets isn't weighed down by years of following systems, rules, and ingrained patterns of behavior.  This is probably the most exciting part of new traders coming into the program - they will no doubt teach us all a few things and help us fine-tune our methods even further.

Great times are ahead and I thank all readers of this day trading blog for being along for the ride!

The post The Growth of Our Day Trading Blog and What The Future Holds appeared first on Samurai Trading Academy.