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9 Successful Day Trader Habits

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Written by Timothy Sykes
Updated 1/24/2023 7 min read

Cultivating successful day trader habits can be the difference between flourishing financially or floundering in your career…and I want more Millionaire Trading Challenge students, so please pay attention!

Truthfully, the differences between the trader who is earning millions and the one who is constantly losing money are typically not that great, but these differences are important and career-defining. And typically, they boil down to your habits (or lack thereof). Simply put, great traders recognize the importance of cultivating money-making habits.

So, how do you recognize which habits are good and how do you, well, make them habits? Here, I’ll introduce you to 9 successful day trader habits, and give ideas for how to incorporate them into your routine.

1. Learning and re-learning the basics. When I observe a new student in the Tim Sykes Millionaire Challenge team making a habit of learning how to trade, I automatically feel optimistic about their future. By setting aside time to study, reading my guides here, and learning the basics of trading, they are showing that they are serious about becoming my next Millionaire Trading Challenge student. Setting up a solid educational foundation is crucial.

However, these habits shouldn’t go away after you begin trading in earnest. It’s a good habit for even established traders to go back and re-learn those same basics on a regular basis. Often, you’ll find that approaching the same knowledge from a place of experience allows you to understand it better.

2. Setting goals. One of the most vital day trader habits? Setting goals. Goals are the way in which you establish various finishing lines for yourself to stay motivated as a trader. I suggest that you have both big goals and small goals. The big goals are your long-term desires: to own a private island, a building in Manhattan, whatever. The smaller goals are the stepping stones that take you toward the big goals and keep you motivated. Setting specific goals and revisiting/adjusting them often is motivating, inspiring, and should be part of your regular routine.

3. Always Seeking more knowledge. This kind of spins off from the first habit, but it takes it further. The best day traders aren’t merely interested in amassing knowledge about day trading. They’re seeking knowledge about everything and everyone and using that knowledge to better their finances.

The fact is, you never know when some piece of knowledge might inspire a trade or investment. So as a day trader, I urge you to make a habit of obsessively following the news, technological updates, world reports, trends…everything. This is a day trader habit that will serve you well as you advance in your career and make you a more interesting and well-rounded person.

4. Daily scanning. It’s a vital day trader habit: you’ve got to scan the market for stocks and that’s why it’s imperative that you utilize this new stock trading software as it’s the best for spotting the best stocks to trade every day. Basically, this means that on a daily basis, you must make a habit of sifting through the many stocks out there and determining what stocks to trade.

Filtering through the many stocks offered can be overwhelming. Happily, there are many resources such as Stocks to Trade that can help you search and filter stocks using specific criteria. The ease that such resources bring to the process makes it easier to make this a habit.

5. Research. Are you researching constantly? If not, you may fail as a trader. If you had to develop just one successful day trader habit, I’d suggest making obsessive research a huge and important part of your routine.

Obviously, you want to research the companies you’re considering trading. But don’t stop there. Research the history of all the hottest stock market sectors and similar stocks to determine potential trajectories. Research the companies and the regions where they are located. Your research can make the difference between a successful, controlled-risk trade and simply rolling the dice.

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6. Observing others. I urge my students in the Tim Sykes Millionaire Challenge to look at other successful Millionaire Trading Challenge traders for inspiration. I want them to see what I’ve done to attain success, as well as what some of my most successful students, like Tim Grittani, have done to earn a fortune all within a few years.**

However, making a habit of careful observation of others comes with a warning. You never want to try to copy what others have done. For one thing, it’s not reliable: there are too many factors at play to really replicate someone else’s success to the letter. Second, it’s not sustainable. Ultimately, by looking at others you’re not trying to copy them but to channel some of their habits into your own work so that you can develop your own trading style.

7. Self-scrutiny. Did you have a big trading score today? If so, make a habit of looking at the events that led up to it. Alternately, did you suffer a big loss today? If so, make a habit of looking at the events that led up to that, too.

Self-scrutiny of one’s trading habits, whether they lead to good or bad results, is important in fostering improvement. It’s a day trader habit that will help you continue to refine your methods, shedding the stuff that you’re doing wrong and cultivating the things that you’re doing right so that you can keep on getting better. Eventually, you may begin finding yourself winning more and losing less.

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8. Socializing. The most successful day traders might be sitting in a dark room lit by their laptop most of the day. But when the trading hours are done, they’re making connections.

Making connections with other professionals is an important day trader habit to cultivate. Not only does it help you feel normal, but it can actually help your career. For one, you never know what relationship you have might result in a business opportunity or a way to diversify. But also, other successful people can just inspire you and give you ideas. It’s an invaluable way to increase your own income, in various indirect ways.

9. Maintaining these habits. How very meta. One of the most important day trader habits for success is…maintaining habits and consistency. Trading rewards routine; the best day traders realize this, recognize it, and as such, they make a habit to tend to these good habits that they have developed.

It’s easy to get lazy with your good habits and fall into bad ones. To really be successful as a trader, you need to make a habit of maintaining these good habits day in day out and when you slip up, recognize the slip-up and get back on track!

Mastering consistency and good habits like these are well worth your time as a trader, and it will contribute GREATLY to your long-term success. So, bookmark this page and ask yourself frequently if you’re really doing your best to become a great trader!

What day trader habits do you need to work on? List them below in the comments and let’s make it happen for you in 2018!

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”