In our article series about Danish daytraders, the editorial team at DaytraderLand.com has been given the opportunity to ask Gustav Mejlvang 10 questions about daytrading.
Read the exciting interview with Gustav Mejlvang, who has just become a regular writer on DaytraderLand.com and also deals with swingtrading.
1. When did you try the daytrade for the first time?
My first experience with daytrading was in March 2015.
I had had luck with trading the stock market and thought it was not that difficult. But without a plan and strategy, I quickly blew my first account. After a bit of hard start, the focus was on learning and reading all I could get near.
2. How long did you go before you had your first profitable month as a daytrader?
After three months of losing (though decreasing), the first month came with a plus in the fourth month. I remember that it was the first month I kept a trading journal and began to read a little on statistics and analyze which markets I performed best in. I lost, for example, almost every time money in Dow Jones, but I did OK in DAX. Then I only traded DAX and have not actually touched Dow Jones since.
3. What was your biggest mistake at the start?
There were many.
Firstly, I did not have a clear plan and strategy. I acted on gut instincts.
Secondly, I was bad at exiting my losers quickly and let my winners run (classic stuff). But everything is difficult when you do not have a clear plan for what you do in any situation.
Overtrading was also a problem for me, but it disappeared relatively quickly.
4. Which markets are you primarily trading in the present?
The only market I’m actively daytrading is the German stock index DAX.
I believe that daytraders should specialize in one market. Even many of the experienced traders who have traded for many years, daytrade only one market, which they in turn know in and out.
Right now, I swingtrade most commodities and the big currency pairs, as I do not have much time for daytrading right now.
5. How many trades do you have on average a week?
When I daytrade, I have about three trades a day based on 1 and 5-min graphs.
Of course, it varies depending on how many setups there are during the day. It may happen that I’m sitting in front of the screen for a full day without a single setup. Patience here is incredibly important in order to avoid overtrading and taking trades that do not fit into one’s plan.
I take about 3-4 swingtrades a week. I only trade on the 1-hour graph.
6. What is the most important feature of a successful daytrader?
That must be patience. It can really save one from big and unnecessary losses.
As a daytrader – and traders in general – it’s easy to be sucked into a world of adrenaline and quick ups and downs. The reality is just that every week and every day is not tradeable. You must accept that.
It can be expensive if you try to force trades that are not there. It took me many losses to find out when it’s best to sit on my hands.
Daytrading and trading in general cannot in any way be compared to a normal job. Here you will not be paid per hour, and there is no guarantee that you will ever earn money. It may sound gloomy, but that’s the reality.
7. How do you handle the really bad days?
I have to say that I have not had certain really bad days as they are sometimes heard of.
I have a relatively conservative approach to risk management, so it’s limited how much I’m losing on a bad day. On the other hand, it may be very hard for the mind to take three losers in a row.
In general, I am quite against the rules that people often have about “three losers in a row, so now I cannot trade anymore today“. Because I have often experienced that the fourth trade is going to be a winner, and where today’s overall performance is significantly better than if you consistently stopped after the three losers. However, it is probably very good for new daytraders to have a risk limit for the day at, for example, 3R a day or three losers a day, but when you start to know yourself and your strategy a bit better, you can experiment a little.
But I always keep a break in the period from 11.30 am to. 13.30, as there is not much volatility in the market during that particular period of time. If I have had a bad session in the morning, I usually go to the gym or doing something else physically active to get rid of some of the feelings before I get back in front of the computer.
8. What is your best advice for people who want to learn a daytrade?
Start with low amounts – as low as possible.
There is absolutely no need to risk more than necessary. When you consider that the failure rate for daytraders is as high as it is, then there is no reason to lose a significant portion of your capital.
In addition, I recommend that you do not trade on a demo account for longer than a month.
There are many emotional aspects of daytrading that you do not get when you’re shopping on a demo account.
So, start low – preferably with minimum bets – so that you can achieve a certain kind of consistency in your performance in daytrading.
9. How much starting capital does it take to get started with daytrading?
Again, I would recommend starting as low as possible. You can get started for only 1.000 kroner.
But, of course, you will not get very far for just 1,000 kroner, but it’s enough to try it and get a sense of whether it’s something you have to throw more capital after.
If you want to live off daytrading it will get complicated. Here comes the whole idea of compound interest in and you got to grow your trading account while pulling money out of it for living expenses. It is very different from person to person, how much capital you need to be able to live off daytrading.
10. What are you doing in 5 years?
It is always difficult to answer questions such as this, but I’m pretty sure it has something to do with trading.
I also have a few other projects that I want to spend time on, but trading and daytrading certainly plays a great role in five years and will do so for a long time.
Thanks to Gustav Mejlvang!
We thank Gustav Mejlvang for an exciting interview and welcome him to DaytraderLand.
If you have questions about Gustav, then ask them down below in the comments box.