In our article series about Danish daytraders, the editorial team at DaytraderLand.com has been allowed to ask Hans-Henrik Nielsen the usual 10 questions about daytrading.
1. When did you daytrade for the first time?
It’s been many years since I first tried daytrading.
Initially, it was an attempt to trade Danish shares a bit more actively, but the result was not impressive. Both because I did not have proper IT equipment, no real method and too high trading costs.
But soon, I began to take different training courses in daytrading, and then I started daytrading futures (mostly e-minis).
2. How long did you go before you had your first profitable month as a daytrader?
I cannot remember the timeframe when I first traded back in the day. But I was on a break for some years as we got children. When I started up again for about 2½ years ago, there went 3-4 months where I needed to get in tune again. I needed to find a method that suited my new life as a parent, but also my psychology. After 3-4 months, I started making money almost every week, and after 6-8 months, I really felt like I was in control of it again.
3. What was your biggest mistake at the start?
At the very beginning, my biggest mistake was that I was not aware enough of risk management. I risked different sizes for each trade and I took too much risk.
In my second round as a daytrader, my biggest mistake was that I was sure it was easy to get back to work. The first couple of weeks went amazing, and so I knew I was right. However, after a couple of weeks there was massive adversity, and then I had to review my entire method again.
It’s a mistake I also see with many new daytraders. Underestimating how long it takes to become constistently profitable.
4. Which markets are you primarily trading in the present?
I trade 80% DAX index and 20% DOW.
The reason for my primary focus on DAX is that it fits my daily life with my family. In fact, my method is also very good in DOW, but here I have to make dinner, put the children to sleep, etc. It is important that you choose a market that fits in with your family, friends, hobbies, etc. Otherwise it will be too much.
5. How many trades do you have on average a week?
It depends a bit on the market. If things are going sideways, I can have days when I trade 0-3 times. But on a more active day, my normal method gives 2-6 trades.
So, on a fairly ordinary week, I’m about 15-25 trades in DAX between kl. 9.30 and 14.30.
6. What is the most important feature of a successful daytrader?
There are several things that I think are incredibly important for a daytrader.
Patience is an important factor. Being able to spend a whole day staring at a market without trend and just waiting for the good setup is paramount. Many daytraders have a good method but they do not have the discipline to stop trading when this is necessary. It’s also something I work hard with.
An understanding of statistics is also important. Here I speak about understanding the concept of positive expected value, which means that one’s method provides long-term profit. But in the periods when you are a daytrader, one or more weeks in a row can give you a minus. But that does not necessarily mean that one’s method does not work. It can be a part of the natural fluctuation that occurs, which one has to embrace so that you know the history in one’s method.
7. How do you handle the really bad days?
I use a lot of my statistics to handle the bad days. When I have a thorough backtest and live test of my method, I know roughly how often I should expect losing days. If I know that I experience, for example, one losing day per week, I can easily accept 1-2 bad days.
In addition, I’m looking for a lot of exercise in the form of strength training, running and karate. Daytrading may be very adrenaline-filled, and if you do not manage to burn this energy, it will damage both physically and mentally.
Generally, I have a greater mental surplus when I am in good physical shape, so I would definitely recommend all daytraders to focus on that.
8. What is your best advice for people who want to learn to daytrade?
As a new daytrader you should find one or more good teachers who have been successful for a while. At the same time, one must accept that it is a craft that takes time to learn and master.
My advice is to set a goal for the first 3-6 months. This goal must be that you will come through the period without losing money.
It may seem like a bit of an unambitious goal for a start. But if you can learn to control feelings, risks, discipline, etc. in this startup period, then the money will follow later.
9. How much starting capital does it take to get started with daytrading?
Today you can get started with, for example. 1,000 kr. It’s fine enough during a period of training. But most people would like to create an extra income by daytrading. For example, with a 1000kr account, a 5-10% return in one month, only gives 50-100 kr. So, of course, you have to increase your size with time.
But my advice is first to focus on creating profits (regardless of the amounts). After that, you can begin to increase your size every month while earning a return on one’s capital.
In this way, capital accelerates rapidly, and you gradually get used to trade for larger and larger amounts.
10. What are you doing in five years?
As I daytrade at the moment, I can see myself trade in 5 years.
The problem of doing all the opening hours of the market is that it is difficult to keep up mentally, physically and socially.
So, at the moment I trade 4-5 hours a day. This gives me time to also develop other parts of my business with education, sparring, trading platforms, etc.
I will probably never be a 100% daytrader. In addition, I have too much social need and I love to teach so I will definitely continue to produce videos, courses, etc.
Thanks to Hans-Henrik Nielsen for the interview.
To see how Hans-Henrik made 134.7% return by 2015, read this article.