Most people believe that day trading is about finding a simple technical analysis strategy or some magic formula, but it's actually a profession and takes some know how and experience. Beginners believe that they will find the "Holy Grail" to trading and that this will allow them to make fortunes. This doesn't only apply to beginners, but the general trading population, except those that know.
Here are 5 simple yet important points everyone should follow:
Consistency that is required is in your mind, not in the market. Many people get frustrated because of the inconsistency and ebb & flow of the market. You cannot rely on the market to be consistent, this is the nature of the beast, it is inconsistent by nature. However, there are times that the market will setup a probability scenario that may give you the edge. It is your job to be consistent in trading that probability scenario and to do so every time the market provides them to you.
Most beginners overtrade. You need to trade like a cat and have the discipline to wait like a cat in the brush until the moment presents itself. This is when you jump on the trade without hesitation. Moral of the story, be patient and don't overtrade - yes easier said than done!
The definition of successful trading is the ability to not make mistakes. Make a list of your day trading rules and post the on your wall or monitor and then follow those rules to the T. You must be more disciplined than the average trader. Never sway from your rules no matter how good a trade looks or feels. If it violates your rules stay away.
Never trade when emotions are high. Being an emotional trader is the worst thing you can do. Do not trade when you are tired or are in an emotionally unstable situation (i.e. a fight with your spouse or friend). Day trading is more similar to athletics than it is to academics. You need to be sharp and ready to make quick split second decisions. There is a lot of money on the line and you need to make sure your mind is sharp and emotions are centered.
Create a detailed log. It is good practice to log everything you do on a daily basis. It is also a good idea to log how you felt when you made that trade and what you were thinking. This type of logging will serve as a form of biofeedback for you. This will help you understand and make more intuitive and rational decisions in the future.
Happy trading!!!
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good to know!
I like this post. I trade with TD and etrade and I like to trade cryptocurrency. I take this as great information keep up the good work. btw can you follow me. thank you
Thanks for the reply. I will definitely follow u.