Battlestations Day Trading Room
We recently launched our Battlestations Day Trading Room at TRi and it’s been picking up steam over the last couple of weeks. Every morning traders jump in a meeting 1 hour before the NY Open and trade right up into the Daily Brief 3 hours later. It’s an invaluable resource to the professionals in the room, but it has also become a great way for aspiring day traders and new people to trading to experience first hand what a day trader’s life is like. The primary focus of the group is trading equity indices and gold futures products but other assets do make an appearance from time to time. In between taking trades there’s also the usual banter about stocks and crypto. Everyone speaking in the meeting is a TRi Veteran with experience operating their business of trading. All TRi members can join the call and listen in on what’s happening. Some moments are more exciting than others and the room can quickly go from not much going on to a flurry of activity. That in itself is a nice barometer of market state as the people in the room are patiently waiting for the market to tell them when to act. If they’re getting excited then there’s a good chance something is about to happen. So far the feedback we’ve received has been really positive and it seems as though our members are finding great value in the offering. We plan on continuing it for the foreseeable future.
I’ve been showing up everyday and trading with a focus on Russell 2000 futures. I like the volatility it provides and because I’m also watching and trading small cap stocks I think that it’s a good fit for me. I’m paying attention to the S&P, Nasdaq and Gold as well but I’ve found it’s best to stick to day trading 1 asset, maybe 2 at most because I find it difficult for me to stay focused if I’m flipping back and forth between charts. The Russell 2k is providing me with plenty of trading opportunities on a daily basis so I’m going to stick with that for now.
In all honesty day trading is one of the most mentally and emotionally challenging things I’ve ever tried to do. I think it’s true to say that we simply are not naturally wired to be successful at it. In fact, I would argue that the opposite is true. Most people fail at day trading because the human condition itself puts us in a mindset that does not lead to successful trading behavior. For example, our constant quest for an injection of dopamine will drive us to over trade or take riskier and riskier trades to get our fix. Other examples would be the tendency for humans to fall into herd mentality or an insistence on being right. None of these things typically end well for our bottom line and we will not be successful at this game if we cannot overcome them.
So this begs the question of how do we set ourselves up to be successful at day trading? While there’s no easy explanation of how to succeed at this and earn lambos everytime you turn on your computer, there are certain qualities and habits that you can develop that will certainly help get you on the right track. Here are some that come to mind for me:
Patience and Discipline
Both of these are core qualities that you must have to succeed in all aspects of trading as well as any endeavor I can think of.
Emotional and Physical Well Being
Trading is very taxing on your emotions and can even affect your physical health if you allow it too. It’s important to regularly check yourself on what state of being you are existing in. If you’re having issues in your life that are causing anxiety or stress, trading will certainly find a way to magnify these emotions. It’s imperative that you take steps to mitigate these problems and not a bad idea to step away from trading altogether until these problems are sorted out.
Can you show up everyday that you have specified as a trading day and work your craft? This doesn’t mean you’re taking trades everyday but it means that you’re consistently showing up and putting yourself in a position to take advantage of opportunities when they arrive.
This also means consistently being in the right state of mind to trade. There are many ways to skin this cat but the important part is that you’re working on building consistency into your life on all fronts. This also applies to emotional and physical well being mentioned above. Are you consistently sleeping well, eating well and implementing methods to support your well being? These could be things like exercise, meditation, breathing exercises, spiritual practices, hobbies you enjoy or whatever else you’ve found that brings you peace of mind. Do more of what works and less of what doesn’t.
Drop the incessant need to be right
There’s few guarantees in life but one thing I can guarantee is that you will be wrong from time to time so get used to it. We like to joke at TRi that even at our best we’ll still be wrong 33% of the time. If I’m only wrong 33% of the time I consider that knocking it out of the park. The problem is as humans we absolutely hate being wrong and it seems we’ll do anything to avoid it. The quicker we can drop this attitude the quicker we can get on the right path towards being a successful trader. Train yourself to take your lumps as part of doing business and don’t get mad about it. Revenge trading is a real thing and it will ruin you.
A Positive Mental Attitude is critical to all of this. I believe that we are the creators of our own reality and it happens through our viewpoint. How we see ourselves and the outside world means everything. Seeing through a lens of positivity we’ll most definitely create a more desired outcome in all aspects of your life including your trading.
It’s funny that I wrote all of this and I haven’t even gotten into the nuts and bolts of actually taking a trade. Strategy, setups and risk management could easily all have articles of their own and that still wouldn’t cover everything. I will write more about them in the future but hopefully this gives you an idea of some of the mental preparation that needs to be done to lay the foundation for a successful day trading endeavor.
Good luck and happy trading!