5 day trading lessons to learn in 2021

5 Day Trading Lessons To Learn in 2021

Trading Blog


January 1, 2021

On the first day of 2021, I just want to wish everyone a happy new year and remind you that the road ahead is up to you! Some time ago, I realized that my journey as a day trader is made up of the many little things I do and don’t do every day. I’ve been trading for over 3 years, hit many bumps and falls, and also had some breathtaking wins and revelations. I’ve talked to consistently profitable traders and coaches, and they were so kind as to share their wisdom and experience with me. Going into 2021, I’d like to pass on some of the most important ideas about day trading that I’ve picked up along the way.

Be yourself and play into your strengths

The more successful traders you meet,  the more you realize that they all trade in completely different ways. This is more than just bulls, bears, or favorite patterns; this is about personalities, character traits, and personal talents. I’ve met many people through my podcast show, and I’ve yet to see a profitable trader who copied someone else’s trading style. Every one of them had to find their own way.

What can a beginner trader take away from this? I’d say, don’t follow anyone blindly. Instead, find several day traders whose vibe feels right, and start learning from them. Don’t copy and paste their strategies or try to replicate their trades. Instead, learn a little bit from everyone, try various methods for yourself, and see if any of them work for you. Make your own watchlists, do your own research. Over time, you’ll develop your unique style that will be 100% catered to your personality and your strengths. I genuinely believe that this is the best way forward.

Having the right mentality is 80% of the game

A lot of trading beliefs build on your preexisting money beliefs. For example, if you’re struggling with increasing your size, you may be petrified of losing money in general. That may tie in with your frugal nature and the way you were brought up. You could approach it from a technical standpoint or start looking for shortcuts. However, sooner or later, you’re going to have to look at your negative beliefs one at a time and analyze where they came from.

We spend so much time with our lives on a default setting, and we rarely stop and think if it makes any sense. If you feel like you’re working very hard, yet you’re getting nowhere, step back from your goals for 2021 and see if there are any mental blocks in your way. So often we tend to be our own worst enemies, but we are also the only ones who can choose to change that.

And if you need help with trading anxiety and fears, there is so much helpful advice out there! There are trading psychology coaches (check my interview with Kim Ann Curtin) and mentors that are happy to get you to the next level. But even if you’re not sure where to start, you can always turn to regular coaches and motivational speakers. As long as their message speaks to you, you can still apply most life lessons they teach to day trading.

Practice empathy and emotional intelligence

Just like physical muscles need to be worked out, our emotional muscles need some exercise as well. Some may wonder how it’s connected to day trading and the stock market. But the truth is, being able to imagine what other people feel like is an amazing skill no matter what kind of business you’re in, and it’s more than just being a people person.

Traders have an emotional response to everything that happens on the market. Understanding various emotional patterns will help you understand the market and its players way better. And on the practical side of things, you’ll be able to predict or, at least, imagine how other traders may react to the news and catalysts and how you need to respond in that context.

And of course, empathy helps you relate to other people, build new connections, and work as a team. You’ll find a way to use this skill every day of your life, be it when trading, communicating in the chat rooms, or with your family and friends.

The market changes; make sure to change with it

As Michael Lamothe beautifully put it in his interview, the stock market is an infinite stream of opportunities. That means that there’s more than one way to make money off of it. Hence, you don’t need to hang on to any one strategy or a specific win rate goal. Day trading has so many variables, and it’s up to you to decide which way you want to go.

However, as with any system with too many variables, this one is subject to change. The market is fluid, and you should be ready to adapt at any moment. If one strategy doesn’t work anymore, start developing a new one. If your win rate goes down, and nothing you do seems to fix it – ask yourself if you’re married to the rate itself or the monetary outcome of your strategy. Reconsider the way you feel about risk; a higher than average reward may be worth risking a bit more too. And if you’re risk-averse, accept that character trait and start working with yourself instead of fighting your every instinct.

The point is, there are multiple ways to think about making money on the market. If the old ways are not working, cut your losses, and move on to the next one. Stop beating a dead horse and start searching for opportunities where you weren’t looking before.

Passion and discipline will get you further than you may think

Many day traders start out thinking that they’ll post profit a couple of months into this new side hustle of theirs. Unfortunately, it doesn’t usually work like that.

In the beginning, no trader has any guarantees of success. Nevertheless, some persist and keep learning and researching despite losing money at first.

Those who are in it just for the cash tend to give up relatively quickly. In day trading, the learning curve is brutall, and a lack of positive results can be extremely discouraging. But if you are passionate enough about the process and disciplined enough to stay in the game, you may just become another successful trader. However, I give you a 100% guarantee that it’s not going to happen overnight.

Self-accountability is important. If we want to improve, we have to keep working at it. New habits don’t just make it into your life. Instead, you have to work hard to build them.

You’ll have to learn a lot about trading. Additionally, you’ll need to learn more about yourself, your emotional responses, ways of dealing with big losses, wins, and competition. I cannot even begin to describe to you how many distractions you’ll come across along the way. You’ll be met with DVD programs that promise instant success and huge profits. You’ll be bombarded with ads made by people driving Lamborghinis, telling you how easy day trading really is and that they’re giving away all their secrets in their chat rooms. Other people’s PnL charts and trade recaps will keep on popping up in your feed, and you’ll have to fight the nasty feelings that they envoke.

But if you have your why in place, you’ll be able to get through all these trials. Having day trading as a passion project will be so much fun, and practicing discipline will put you on the right track.

The goal was never to get in, make quick money, and get out. Traders aiming to do that have long given up. The real goal is to learn the art of day trading, figure out how the market works, and make money and memories along the way. This is what will keep you going through the good and tough times alike. It is not a sprint; it’s a marathon.

I hope that this blog post has helped you look at day trading in a slightly different light. If you like my message, consider subscribing to my Youtube channel, where I post genuine trading videos. I also have a weekly Podcast called “B The Trader”. You can also subscribe to a newsletter that summarizes all my day trading content for the week.

Thank you so much for reading! Have a great 2021, and best of luck to us all!

  1. Christian says:

    Love this blog Alex! You do a ton of great work and have always helped me with becoming a better trader but not only that you also have a great perspective on what I call a “profitable mindset”. I appreciate all the hard work and effort you do to help all types of traders stay rooted in why they wanted to become a trader. Keep up the amazing blogs and I can wait to see what 2021 has to bring!