Alexander Elder Answers Common Day Trading Questions | Podcast
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Talking points on this podcast:
- What preparation do you need for day trading?
- How much money do you need to day trade?
- What are the risks involved in day trading?
This time on Trading Global Markets Decoded, our host Martin Essex is joined by Alexander Elder, a Russian-born professional trader, teacher of traders and author of The New Trading for a Living – the best-selling trading book in the world, translated into 17 languages.
On this episode we focus on day trading, covering the preparation you need for day trading, the general capital requirements, the risks involved, and more. You can listen to this podcast by clicking on the YouTube link above or by using one of the alternative platforms listed below.
What preparation do you need for day trading?
The podcast begins with discussion on how best to prepare for day trading. What market experience is advisable? Alexander says, “I would say to anyone who wants to day trade: Have you made money swing trading? Can you reliably make money over a period of 18 months or so, buying and selling short, and holding positions for a few days or a few weeks?”
If you can’t, day trading is not going to work for you, Alexander believes. “The difference between swing trading and day trading is that in swing trading you have time to think. The market is closed, you look at the charts, you take a nap. In day trading, if you stop to think, you’re dead.”
How much capital is needed to day trade?
In terms of capital necessary for day trading, how much is the right amount? “I’d say very little to begin with; you have to earn your right to size,” Alexander says. He warns against beginner traders thinking they’re going to make money as soon as they start day trading. “You hear dentists make good money, and think ‘I’m going to be a dentist’. Well, there is money in dentistry and some dentists make a million dollars a year. But I can assure you they did not make a million dollars a year in their first, second, third or even fourth year. It takes time.”
He stresses that traders have to prove to themselves they can do it, so advises on a small account size, perhaps $5,000. “Every beginner loses money, so make sure you don’t lose much because if you lose much you become discouraged.”
For more on day trading and which trading style to choose, check out our helpful resources below.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.