[For Day Trading Beginners] Things to Know About ‘How to Lose’ Before Aiming for 100,000 Yen a Month

“It would be nice if I could earn about 100,000 yen a month from day trading.”
When starting to trade stocks, I think many people think about this at least once.
If it’s 100,000 yen a month, assuming you trade 20 days a month, that’s an average of 5,000 yen per day.
Looking at just the numbers like this,
“Isn’t that surprisingly doable?”
you might think.
However, when you actually think about it, the difficulty of day trading isn’t just about “whether you can make a profit of 5,000 yen a day.”
Rather, as a beginner,
it might be better to think about “how not to lose big” rather than “how to win”
first.
This time, I would like to think a little about “how to lose,” which you should know before starting day trading.

Why do people want to look for “ways to win”?

When researching day trading, you really often see information like
“Buy if you see this chart pattern,”
“You should use this technical indicator,”
or “This time of day is the target.”
Of course, it is important to study how to read charts and knowledge of buying and selling.
But, I think a little here, just because you learned that doesn’t necessarily mean you will be left with a profit.
For example, suppose you trade 10 times and make a profit 7 times.
“Isn’t a 70% win rate pretty good?”
you might think.
However, if the 7 profits are small and the remaining 3 losses are large, you may end up in the negative in the end.
Conversely, even if you don’t win every trade, if you keep your losses small, you may end up with a profit.
It’s obvious when you’re told, but when you’re actually trading, it’s surprisingly easy to forget this.
In other words, what’s important is

not just “how many times you got it right.” That is what it means.

A single large loss can change the flow

It’s not necessarily because beginners keep losing every time that they find it difficult.
Rather,
winning small
↓
winning small again
↓
gaining a little confidence
↓
losing big once
this kind of flow is scarier.
You’ve spent days building up profits little by little, only to lose it all in one trade.
When that happens, feelings like
“I worked so hard to increase it this much”
and “I want to win it back today”
come up, right?
And from there, you might trade with larger amounts than usual or enter in situations you would normally pass on.
This, I feel, is surprisingly overlooked, but more than the initial loss,
the next action taken to try and recover from that loss
can sometimes become a bigger problem.
The market doesn’t know how much you’ve lost today.
Just because you thought, “I want to win another 5,000 yen,” doesn’t mean a convenient situation will appear for you.
I think this is a very important point when considering day trading.

Setting a quota of “100,000 yen a month” changes your judgment

Having a goal of 100,000 yen a month is not a bad thing in itself.
Rather, you can continue studying because you have a goal, right?
However,
“I want to aim for 100,000 yen a month”
and “I absolutely have to earn 100,000 yen this month”
are quite different things.
If you don’t have enough profit at the end of the month, you might start thinking,
“Another 20,000 yen”
“Let’s trade a little more today”
“Maybe I can reach it if I increase the number of shares.”
But when you think about it, what you are looking at has changed from that moment.
You are not trading by looking at the market, but

trading by looking at the target amount.
You end up in that state.If there is no good situation, don’t trade.
This is also a perfectly valid judgment in day trading.
Instead of thinking of a day where you did nothing as a “zero profit day,” think of it as

a day where you didn’t make a trade with weak grounds.
When you think about it that way, I feel like the perspective changes a little.

“A winning trade = a good trade” is not always true

There is one more thing you should know as a beginner.
That is,
just because you made a profit doesn’t mean the judgment was correct.
For example, suppose you were in a situation where you should have sold, but you kept holding it, thinking,
“Maybe it will return if I wait a little longer.”
And then, the stock price happened to return and you made a profit.
Looking only at the result, it’s a success, right?
You might think, “I’m glad I waited.”
But what if you learned from this experience that “it will return if I wait”?
You might start waiting the same way next time, and the time after that.
And when you encounter a market that really doesn’t return, there is a possibility of a large loss.
Conversely, there are times when the stock price rises immediately after you have kept your losses small according to a pre-determined standard.
This is frustrating, isn’t it?
I think you’ll think, “I shouldn’t have sold.”
But if you change your judgment every time by looking only at the results, you will lose the standard for your own trading.
Therefore,

think about results and judgments separately.

This is plain, but I think it’s a very important mindset for continuing day trading.

Rather than increasing ways to win, reduce the causes of losing

When studying day trading, you want to keep looking for new methods.
Trying to increase indicators, learning different chart patterns, or looking for other stocks.
Of course, studying itself is necessary.
However, when looking back at how you lose, there are times when you think,
“Aren’t I failing in similar places every time?”
Entering in a hurry. Not being able to admit losses. Trying to win it back. Trading even though the grounds are vague.
If you are losing repeatedly for the same reason, rather than learning one new way to win,

it might be better to reduce that bad behavior first.

And this is what I want to convey most this time.
When people talk about improving at day trading, I think it’s easy to imagine “becoming better at guessing correctly.”But that’s not all there is to it.
Reducing trades you don’t need to make.

I think this is also a great improvement.

So, what should you look at in actual trading?

Reading this far, some of you might have felt,
“I understand the mindset. But when actually buying stocks, what should I look at?”
So, what should you actually do?
From here on, just having a mindset will not be enough.
When you actually trade, how do you look at the chart?
What do you check on the board and the price history?
Where do you buy?
Where do you sell?
How much loss do you allow?
How many shares do you trade with?
And what do you look back on after you’re done?
You need to gradually shape these judgments into your own rules.
I think it’s easy for day trading to focus on “where should I buy?”
But just as important as that is

thinking in advance about “what to do when the prediction is wrong.”

For those who want to know the concrete flow to aim for 100,000 yen a month

In this article, I focused on the “ways to lose” that day trading beginners should know first, and how to face the goal of 100,000 yen a month.
Reading this far, some of you might have felt,
“Then, how should I think about actual trading?”
In the article below, I have summarized everything from the basics of charts, boards, price history, entries, profit-taking/stop-loss, fund management, trading records, and the mindset to aim for 100,000 yen a month, following the flow of actual trading.
“I want to start day trading, but I don’t know what to learn first.”
“I want to have my own judgment criteria instead of buying and selling aimlessly.”
“Before increasing profits, I want to acquire a mindset that avoids large losses.”
This content is aimed at such people.
Of course, this is not a method that guarantees profit, nor does it guarantee 100,000 yen a month.
It is summarized as an article for beginners to learn the basics of day trading in order while avoiding large losses.
If you are interested, please read this as well.