To answer this question, is day trading profitable ? I will first establish a few points as the foundation. Whether day trading is profitable depends on 4 areas. Only when we are have mastered these 4 areas, then day trading can be very profitable.
These 4 areas are
1 Start up capital
You need a certain level of start up capital to make money from day trading. Depending on the instrument that you are trading, the margin required may be from 2% for forex, to 20% for commodities. Due to the leverage nature of trading, you do not need to put up the full value of the contract.
For starters, even for a small trading account, you would still need to fund about $10,000.
2. Technique and skill
Another important factor that will determine whether you are profitable with day trading is your level of skills in the techniques being applied. There are many techniques that day traders use to determine entry points, take profit and stop loss levels.
This ranges from reversion to the mean strategy to moving averages spring strategy and many others more. Moreover, different strategies makes use of a range of technical indicators which you would have to master.
We make money from day trading primarily by exploiting 2 concepts. One is the idea of trading in the trend whilst the other is trend reversals. All of the strategies and technical indicators is to help to decide on playing on either one or the other.
You can find out more about the different strategies Here
Another crucial factor that determines how profitable day trading can be is the experience of the trader. A day trader has to be nimble to be profitable. The mantra is to get in fast, get out faster. This takes experience to exploit trend and short term trend reversals within the longer term trend. This is especially true during times of great volatility surrounding major events and announcements.
Day traders can trade anywhere from 1-2 minutes charts, up to 30 minutes chart. As the time duration is short, the price movement tends to be smaller in magnitude and therefore the size of your position relative to your account capital is crucial in determining your profitability and risk management. All these take experience
4. Control of emotions and mental strength
One of the most important factors to determine whether you can make good profits from day trading has more to do with your emotions and mental strength rather than anything else.
Day traders cannot let their emotions get the better of them or they will lose a lot of money. To profit from day trading, traders have to keep their emotions in check. When we got it wrong and our position is taken out by the stop loss, we have to continue and set up new trades.
When we have mastered the techniques and strategies and based on our experience, we must be confident that our winning calls to outnumber our losing calls. Another way to ensure that our wins will be bigger than our losses is risk reward ratio that we set for each trade which is usually 1:2. This means that when we win, we win double our losing trades.
Mental strength is very important in that we must have the mental strength to stick to set up trades based on what is identified. Many times, we tend to end up having more losing trades when we lose this discipline, get overcome by emotions and set up trades that should never have been set up.
Is Day Trading Profitable ?
Once you have control of the 4 factors, day trading can be extremely profitable. For the same amount of startup capital, there can be many trading opportunities over the day. With such velocity, as long as we have a risk reward ratio of 1:2 and executes a higher number of winning trades over losing trades, the profit potential is huge
Coronavirus is spreading throughout the world. Its effects were first witnessed in China, whereas now Europe is the epicenter of the maximum cases. Cases in America are also rising every day.
The effects of the pandemic have caused a disruption in our economy, steep stock market losses and a standstill in most business sectors. In these tough times, would it be safe to purchase a car? Let’s take a look.
How to Prepare to Buy a Car during Lockdown?
1. Are Auto Dealerships Functioning?
The situation varies from state to state. Auto dealers are still open in these tough times of fighting against Coronavirus. For instance, someone may require a car to reach the hospital or healthcare workers may need a car to commute to and from their workplace. However, strict guidelines outlined by the World Health Organization are being followed at auto dealerships. Auto dealers are practicing social distancing, offering to deliver the purchased cars to your homes, maintaining hygiene and eliminating all in-showroom activities. Additionally, online auto dealers can help you with your car purchase.
It is best to avoid going to the dealership. Instead, call the dealership lot and ask them to mail you the prices online.
2. Can I Research the Cars Available?
Buying a car may not be the primary need for you right now but you can use the free time to research the best available options. You may not be able to visit a dealership to research the different cars. However, you can use auto portals to make the most of the digital tools. Research the type of car that you wish to purchase. Try to narrow down your needs and understand whether you wish to purchase an SUV, sedan, hatchback, luxury car, etc. On the basis of the make, model and type of car, you can select the car that you wish to purchase.
3. How will Auto Financing Work in these Times?
Once you have selected the car that you want to buy, the next step is auto financing. The best-case scenario for buying a car as soon as you are out of home is to get a pre-approved auto loan. Auto dealer websites will help you figure out the monthly payments you can comfortably make, your current debt-to-income ratio as well as the approximate interest rate to be charged on your auto loan. Therefore, make the most of your time and get pre-approved for your auto loan.
Prepare for buying a Car: Make the Most of Staying Home
In the current scenario of the Coronavirus outbreak, it is imperative that you stay home. However, it does not mean that you cannot work during this time. Research and find out how to purchase a car. Set your financial budget, use auto dealer websites to your advantage and get a pre-approval on your auto loan.
Across many countries where the latest strain of COVID-19 tends to make an impact, social distancing and isolation have been put in place. Employees have been asked to work from home, cities have been placed under complete lockdown and educational institutions have been shut down, as if they never existed.
Cash as a Medium of Exchange, Loses Its Dominance
We all thought and strongly believed that cash will always be around, but it looks like COVID-19 is making us get some perspective on a lot of things, including this.
The fact that hand-to-hand exchange of cash or physical currency might transmit the virus, majority of the countries around the world are reconsidering the use of cash. In fact, it won’t be wrong to say that Corona Virus has turned out to be a catalyst in bringing digital payments into the mainstream.
For instance, China decided to abolish thousands of banknotes or disinfect them in order to stop the virus from spreading, at least in the short run. SCMP recently reported that a local branch of the People’s Bank of China has been destroying paper money that was circulated through high-risk settings in Guangdong province, such as food markets and hospitals.
South Korea also seemed to follow suit, while in the US, the Federal Reserve began to store banknotes coming in from Asia before they are recirculated back into the economy.
On the contrary, Canadians tend to go with a completely different approach. There are rumors that some people there have been shoving the banknotes into washing machines to get rid of Corona Virus, as their paper money is made of plastic. And, that is taking money laundering to a whole new level!
A Shift Towards Digital Payment Platforms
Ever since the lockdown, the frequency, as well as the total monetary value of transactions, has dropped. However, with people only buying necessary goods and storing them in one go, the value per transaction has increased more than ever before.
So, whichever part of the world you are, now is the perfect time for making the best of shopping carts and payment gateways. Having that said, apart from China, Canada, and the US, as mentioned earlier, here’s what others are doing:
The use of cash in Britain has halved in just a few days after the imposition of a nationwide lockdown by the government. Even the stores that sell essential day-to-day use of goods and services are trying to avoid taking paper money. For transactions of GBP30 (~$40) and under, the majority of the stores tend to accept contactless payment, either by mobile payment or credit and debit card, for instance, Apply Pay.
As far as Russia is concerned, where the official cases of Corona Virus seem to be low as compared to other countries, a lockdown is still instituted in Moscow and other major cities in the country. And, this leaves the country to rely on online payments and discourage the circulation of banknotes.
In Australia, the basic amenities outlets and stores have also encouraged their customers to go with the online payment methods and avoid touching EPOS machines as much as possible.
Other emerging regions, such as Africa, known to be having the largest unbanked population in the world, is also taking measures in the global pandemic and emphasizes to make greater use of contactless payments.
M-Pesa, the dominant player in Kenya, is all set to waive fees, and hence the daily transaction limit has increased from Ksh 70,000 (=$660) to Ksh 150, 000 (=$1400).
Until 2018 or even 2019, digital payment adoption was quite slow and only was seen to be more in use by developed countries. Reasons being, demographic, cultural, and technological barriers-many of which were a function of economies at different stages of development. However, since the adoption is now made mainstream, due to the uncertain longevity of Corona Virus, getting onto the bandwagon and choosing an online payment solution is the step towards a better and a safer future.
In the area of business consulting, goal-setting theory is the most useful in predicting behavior in the business environment. Most business professionals believe that people who intentionally set goals for themselves and focus their behavior to accomplish their goals tend to be more successful. A basis for motivation and directing behavior are the two functions of goals.
You may possibly know that within your past work experiences, a goal you set for yourself was usually accomplished after making a specific goal, a detailed plan to achieve that goal, and following the plan. For example, when you have needed to have employees or contractors prepare for a specific business project, you possibly made a plan for how long to prepare and determine the skills needed to complete the project successfully, when to practice the skills, which skills to practice, and a practice assessment to measure their knowledge and keep track of their progress.
Research into business consulting has found that when a goal is more specific, the individual’s effort is more deliberate and the behavior is better directed and they are business environment. Receiving feedback about performance is very important. This shows the person whether or not they should work harder or stay at the same pace. As mentioned earlier, when giving practice assessments to the employees or contract workers, the results would be your feedback to let you know if a needed to work harder in preparing for a successful project completion.
Goal setting is effective in groups as well. It can be difficult to achieve at times because the overall success of the group depends on more than just an individual member. For example, you may possibly work in a business environment that requires a lot of group work and culminates in a group project that requires team building. If some of the team members do not carry their weight, the group will not be as successful. Each member in the group needs to have clearly, defined roles.
People do not make a conscious decision of dedicating themselves to be a failure. But, people can fall into this mindset if they do not set certain goals for themselves. When people do not meet their stated goals, then the goals should be revised. Business research shows that the goal-setting theory is one of the most legitimate and practiced theories of motivation in the business setting.
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