Anyone can make money trading.
There are successful traders with all sorts of strategies. Some go long. Some go short. Some trade futures. Some trade stocks.
But all of the traders who find success long term have an edge, risk management, and self awareness.
Find a statistical edge in the market.
Trading is like playing poker, you need to take the opportunities where the odds are in your favor.
There are professionals who make a living playing poker. They don’t make a living by winning every hand. They make a living by playing the odds out over thousands of hands. The same is true for stocks. You can make money by being right only half the time.
You just need to know over a thousand trades that you can make more on the half that your are right than the half you are wrong.
Don’t blow up your account.
The most common cause of failure in trading is people losing all of their money on a few trades where they got stubborn.
There are a few common risk management strategies out there but the most common I have come across is you should never have more than 1-2% of your account at risk on any one trade. If you have $1,000 that means you can take a maximum loss of $10-$20 on a trade before you should be out.
Managing your risk will keep you in the game long enough for the odds to work in your favor.
Beware your ego.
Many traders lose way more money than they should because they don’t want to take a loss.
Fear and ego are two of the main culprits. You fear that if you get out, the stock will turn around in your favor. You don’t want to lose money and be wrong. Revenge trading after a big loss to make it back often compounds the mistake. The ability to be detached from the outcome of each individual trade is a super power.
For beginners, or anyone who has not become profitable yet, you should set a max loss per day on your account to protect yourself from yourself.