How to earn $200 a day trading?

Being able to make a living trading stocks is a dream aspiration for many people. With little more than a WiFi connection and the time to place and monitor your trades, it seems that untold riches and the freedom to pursue your own destiny are just a few well-aimed mouse clicks away.

But the reality of trading is often much more prosaic, as most investors come to recognize, sometimes too late, the importance of being fully equipped to deal with the demands of the trading world.

Here, you’ll discover the most important things it takes to successfully trade the markets and eventually get to the point where you can answer the question: how can I make $200 a day trading stocks?

What type of trader are you?

The first thing to consider is what type of stock trading you want to do. Are you more inclined to the value investing side, where you dig deep into a company’s potential to generate long-term returns and buy stocks knowing you’ll be invested for months, possibly years?

Or are you drawn to the thrill (and danger) of day trading, where you’ll be making short duration, high frequency trades multiple times a day, often holding your positions open for just a few seconds in an attempt to take advantage of the advantage? of fast moving arbitrage and scalping opportunities?

Or maybe you feel moved to take the middle path instead. Swing trading, for example, combines some elements of both value and day trading, allowing you to identify more short- to medium-term trends in a stock’s price movement over a period of weeks and months , with the expected result. to allow winning trades to be executed. for longer, making more profit in the process.trader.jpg

Know the players, know the game

Whichever trading style you choose to employ, learning from the best is helpful. And success leaves clues, which means it’s a great idea to research the trading strategies of investment gurus with proven track records.

A great personality to start with for value-oriented investors would be Warren Buffett, one of the most famous and successful stock traders on Wall Street, and one of the richest men in the world.

The Oracle of Omaha is best known for following the Benjamin Graham school of investment, where investors seek to find a mismatch between a company’s current market value and its real intrinsic value .

To do this, Buffett will consider a variety of factors that influence a company’s performance, including its debt levels, cash flows, and profit margins.

Fortunately, for those new to this type of investing, Buffett’s holding company, Berkshire Hathaway, publishes an annual letter to shareholders detailing the investment firm’s actions over the past year, and it can be a real gold mine. of information for investors looking to gain insight into Oracle’s famous way of thinking.

On the other hand, for those who decide on swing trading as their final strategy of choice, Mark Minervini also has some excellent material to dig into.

Minervini is the creator of the Specific Entry Point Analysis System, or SEPA, and focuses on identifying the common historical attributes of high-performing stocks, using that information to determine which companies are price inefficient, and then deciding which is the best. best point of entry to the market. to minimize risk and maximize reward.

To learn more about this unique trading system, read Minervini’s book Trade Like a Stock Market Wizard to discover the secrets of this investment approach that once gave Mark a 33,500% compounded total return in just five years and trading medium.

Finally, if day trading is your thing, consider following the career of 2020 US Investing Champion Oliver Kell, who documents his day trading on his Twitter account and has a website where he further explains the ins and outs of your prize. winning trading methods.type-of-trader.jpg

Now it’s time to do the math

If your ambition is to make $200 a day trading, or $100 or $1,000, you’ll need to find out what exactly your average daily return is due to your initial capital investment.

Obviously, the more money you can put up front at the start of your trading journey, the fewer returns you’ll need to generate every day if calculated as a fraction of your initial funds.

However, this does not mean that you should invest all your available capital in the pot when you are just starting out. As a new investor, you will continue to learn your way around the investment landscape, and if you are tempted to risk more money than you can afford when your skills are less honed, you are opening yourself up to losing more than if you were just starting out with a small commercial bank. .

And this is where it also becomes important to simulate your trading ideas with a practice account. By “paper trading” your investment theories first, i.e. using an online demo trading platform to execute simulated trades without risking your real funds, you can get an idea of ​​how a typical trading session plays out and also gain detailed quantitative records of how your trading model performs not only in the short term , which can lead to misleading results, but also in the long term.

This is also where you can measure the types of returns that different trading strategies produce and the risks you will need to take to earn those returns. Depending on your risk tolerance and the profit you have to make, there is usually a sweet spot, or optimal trading approach, that will get you to your target of $200 per day.

Start trading for real

Once you feel like you’ve exhausted all the benefits of demo trading, it’s time to move on to the real thing. You need to know what trading strategy you are going to use, what your initial bank limit will be, and what percentage of your bank’s return you will need to make on a weekly or monthly that you’re trading with your own money, nerves, uncertainty, and poor trading decisions are likely to play a bigger and more detrimental role than ever before. Remember not to chase losing positions and, conversely, do not close a profitable trade too early.

It is a natural progression for a successful investor to go from making $200 a day to making $400 a day. However, don’t fall into the trap of over-leveraging your position – this will definitely skew the risk-reward profile you have taken so long to perfect and can potentially open you up to bigger losses if things don’t pan out your way.