There's no denying that long-term, buy-and-hold investing can produce extraordinary results. Berkshire Hathaway is the best example of this. I am a day trader and find value in long-term investing. Because I only need to focus on day trading, I have an investment advisor who manages the long term portion of my portfolio.

The contrast between what he does and what I do could hardly be greater: my average time holding a stock is five minutes, and sometimes, I'll be in a stock for mere seconds. With those holding times, it doesn't take long to find out if my investment strategy was right, wrong, or wrong.

It is no exaggeration to say that day trading can be like the compression of a lifetime investing in one year. I have made over 20,000 trades so far and plan to continue trading for many years to come.

Two common stages that day traders go through

The first stage is beginner's luck. I actually think it's a thing with day trading, and I've experienced it myself. In my first year of trading, I made about $30,000. Was I pumped! Yes, it was work, but it sure beat pumping gas, which I had done years before, or working for a bad boss, which I also knew about.

Over the years, I've heard enough similar stories from other traders to believe that beginner's luck is pretty common. However, a harsh reality is always waiting in the wings for those happy newbies, and it even has a name: regression to the mean.

After my second year of trading, I gave back those early profits and was now at rock bottom. But in my third year of studying and working hard in the trade – I wish I could say I turned the corner, but I didn't. I lost a lot of money and was on my last chance before I had to get a “real” job.

Some people can look back at turning points and identify a mentor who said the right thing or a chance meeting that made the difference. In my case, keeping a journal of all my trades saved my day trading career. I recorded not only the trades but also my strategy the moment I took the trades. In cleaning up that journal, I noticed a trading pattern that resulted in losing trades and a different set of characteristics for my winning trades. With this knowledge, I turned my ship around.

This brings me to the second common phase, “friction investing”. Sometimes, when day traders experience a tough loss, they are afraid to take more risks. They become mentally driven and it becomes more difficult to regain their trading confidence. It could be the start of a downward spiral.

But here's the really cool thing: the same phenomenon sometimes happens with wins. After a particularly memorable win, traders will retreat and take smaller and smaller trades.

Back to my trading diary: There are about 250 trading days in a year. I have found that my top 10 trading days usually account for over 20% of my profit for the entire year. On those golden days, am I throwing caution to the wind? No, and that's where the flying analogy comes in.

Connected: How cognitive biases can affect your trading and investment decisions – and how to reduce their effects

Trusting your instruments

When learning to fly, practice only on days with good weather. You are operating under what are known as the “Visual Rules of Flight”. But if you stick with it, you will learn the “Rules of Instrument Flight”. When you are allowed to fly with those rules, the good news is that you can fly in all kinds of weather. The bad news is that you have to ignore your gut and learn to trust your instruments, or you'll fall flat.

The same is true with day trading. Successful day traders are not gamblers or cowboys, but more like experienced pilots. They make one profit and loss calculation before making a trade. They will see a familiar pattern in the behavior of the stock price, including other factors such as trading volume, company news, etc. If it adds up, they get the trade.

The rest is where successful traders make money: They stick with the parameters they set. This means that if the stock goes up, they have a process to take some profits off the table while allowing the stock to continue to go up. But if the stock starts to fall, they don't let it go “a little longer”, hoping it will turn around. Instead, they sell without hesitation and cover the loss.

Either way, they trusted their instruments and would live to trade another day.

Connected: Day Trading: How To Get Started

Don't get me wrong: Even after 20,000 trades, I can control my emotions and trade according to my instruments. It never gets “easy” because I can always follow my parameters. Sometimes, emotions will get the better of me and I'll think: What just happened? Then, reviewing my journal will reveal that on that day, my emotions got the best of me on that trade. It's up to me to become more disciplined in the heat of the moment, so I apply what I learned from that last fairy.

There is no going back day trading in a safe for profit system. You can improve your chances of doing well in this most unforgiving environment. You achieve this by doing three things:

1. Record what you were thinking at the time and how it worked;
2. Analyze that transaction and how you can adjust your parameters in the future; AND
3. Have the discipline to stick to those course corrections the next day.

There is no guarantee of profits, but this is the only way I have found to stay in this profession for a long time.