01In Trading Strive For Consistency
Strive to execute each trade perfectly, and don't focus on the dollars. If you execute a winning trading plan (that you've researched, tested and practiced) then the profits will come. When you focus on execution you develop consistency because you're doing the exact same thing every time. Use a checklist on every trade if needed.
If you want to build wealth, consistency is key. If you make money one day and lose it the next, or make money one month and lose it the next, you're on a treadmill getting nowhere. Focus on consistency, so you're able to generate profits/income each month.
The professional concerns himself with doing the right thing rather than making money, knowing that the profit takes care of itself if the other things are attended to. - Jesse Livermore
Day trading has its benefits, but so does investing. Mainly, investing is much more passive. Spend a couple hours each month researching stocks with high profit potential, and once those investments are purchased they require minimal effort to maintain over the next one to five years.
If you're a day trader, you already love the financial markets. Transitioning that passion to investing will come fairly easily once you get into it. After you've made a few investments, and find more assets you want to invest in, you'll likely find it much easier to save (spend less), because you'll want to have money to invest in those stocks or other assets.
Building wealth means you can't spend every cent you make, but having capital sit in a bank account, being eroded by inflation, isn't a great idea either. Put capital you don't need right now to work for you.
03Multiple Streams of Income
If you day trade for two to four hours per day (two hours is really all you need), you have lots of free time to apply your intellect to other endeavors. Consider utilizing secondary income stream.
Earlier we discussed investing. That can be a form of secondary income, especially when investing in high yielding dividend stocks. The dividend stocks create a steady stream of monthly or quarterly cash flow.
Ideas for a secondary income stream include starting an online business that doesn't require much time to operate (such as an eBay business), writing about topics you enjoy and are good at, or creating a website to do the same.
Choose a business model with minimal risk, costs and overhead. Your goal is to increase your income, not end up drawing capital you made day trading.
Just as day trading takes time to learn, your secondary income stream will also take time to grow.
04Tying The Three Steps Together
The first step to wealth generation is making sure your day trading income is stable. Focus on consistency. Making loads of money one month, but losing a bunch the next, does nothing to foster a sense of security where you're able to save, invest and possibly start another venture.
Once the day trading income is stable--stability comes from focusing on process as opposed to dollars--then begin to invest. This process forces you to save, and through researching investment ideas you'll have a reason to save/invest and not spend everything you make.
With a consistent income and some money being saved/invested each month, start building alternative sources of income. Consider a business--online or freelance-- with low start up and low monthly costs. The business shouldn't require more than an hour or two a day to operate. Between day trading and the secondary (or multiple) income stream, you're putting in an efficient day of work and building long-term wealth.
As income increases remember to save/invest a proportionate amount.
3 Ways Day Traders Increase Their Wealth
It's About How Much You Spend, Not How Much You Make
Like any other job, building wealth require some sacrifices, such as spending less than you make, learning to invest and building an alternative income source. If you're a day trader, experiencing ups and downs in your income, here are three ways to level out your income and build greater wealth.