Things not to Do and Use When Daytrading
Daytrading is a very difficult endeavor for anyone who's tried it. Those who go through it day after day will agree that everyday is different and that each day requires maximum attention. The end of each trading day leaves the daytraders exhausted. But not only does it take stamina, endurance, high degree of concentration and focus, there are other factors that make a daytrader a special breed apart from other types of traders. Every tick or second counts. Precision and personal discipline makes the difference between a loss and a profit. Not everyone is cut out to be a successful trader. In fact, 95% of daytraders fail eventually. But here are a summary of what NOT to do that can help further enhance his chances of surviving the daytrading jungle.
1.Do not discard or discount money management. This is the single most important rule. Using sound money management can lengthen the trading career. The longer his trading longevity, the higher his chances of becoming successful. Success requires experience and experience requires time. Using money management is buying time to become profitable in the long run.
2.Do not start trading without a trading plan or a well-tested profitable strategy. A well-thought, well-researched trading discipline helps maintain control and focus to trader properly and not panic.
3.Ego is NOT money. Using ego to trade is tossing money the window. Ego and money cannot co-existence in the markets. Never have, never will.
4.Do not be distracted with news. News creates emotional states: hysteria, euphoria, panic. These states of mind will not help trading. News does move the market but trading the markets is more profitable than trading the news.
5.Do not be distracted by the surroundings. Absolute focus is a must. Outside distractions and interruptions will negate the trader from receiving the steady flow of market information.
6.Do not count the money before the trade is closed. This is a newbie mistake where money is the reason he becomes a trader. Money is the least important factor in becoming successful. Focus on the market and not the money, market will reward accordingly.
7.Do not be tempted in entering trades that look too good to be true. There are days when the markets seem so easy to take money from the market. Those are the days that ego and feeling of invincibility that will precede the next losing streak.
8.Do not let the market dictate the mood. Gap ups and gap downs and quick moves up or down can create a false sense of who's in control and direction. Careful with these sentiments because the opposite direction may just be around the corner. Professionals wait for confirmation before joining in the euphoria or panic.
9.Do not be bored or angry if there are no setups. There are days when the biggest accounts dry up are those trendless, low volume days. Watch for them and stay away from them.
10.Do not think that today is the same as yesterday or any other day. No day is alike. If he believes it is, then the bias has been sucked into his mind, creating a setup for a losing day.
11.Do not forget to use the stop loss orders immediately upon entry. Stops are the life jackets to save the trader from himself and the markets. Stops will help him stay safe to trade another, the one that may take his equity higher. No single trade should be a show stopper.
12.Do not think the market is an easy place to make money, even when it does look like it. Take everyday as a new day without remembering the previous days. Complacency is the enemy of profitability down the road.
13.Do not follow opinions and calls in newsrooms, chat rooms or forums without doing your own research. These are biases that will lead to losses or worse, the trader paid and learned nothing from them.
There are countless important rules but these are the most pertinent in getting the trader started in thinking and preparing for the world of daytrading. This type of trading is probably one of the most difficult anyone has ever tried, even more stressful than being a CEO of a big corporation because personal defects and shortcomings will be exposed immediately and the process of becoming successful is a road full of self development and self examination that will be painful. Finding self, a successful strategy and physical and mental stamina will be a long journey. But the reward carries an enormous satisfaction when the objective is finally within reach.
Larry Swing CEO & Head Swing Trader swing trading with mrswing.com theboss@mrswing.com +1 (281) 968-2718 Yahoo & Skype ID: larry_swing
Article Source: ArticlesBase.com
