Three Big Day Trading Mistakes to Avoid

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THREE BIG DAY TRADING MISTAKES TO AVOID By www.ProfitableTradingTips.com

Transcript of Three Big Day Trading Mistakes to Avoid

Page 1: Three Big Day Trading Mistakes to Avoid

THREE BIG DAY TRADING MISTAKES TO

AVOID

By www.ProfitableTradingTips.com

Page 2: Three Big Day Trading Mistakes to Avoid

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Day trading stocks, commodities or

Forex can be profitable.

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And there are three big day trading

mistakes to avoid along the way.

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Before We Continue…

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First of all day trading is a business

and not gambling.

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Second, there are rational limits to

how much money you can make and

when you can make it.

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And third details like setting your stop

losses are the most important part of

successful day trading.

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Here are more thoughts about the

three big day trading mistakes to

avoid.

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Going to Work Every Day

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Day trading is about making money.

To make money in a business you

need a plan.

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You need to stick to the plan and you

need to continually modify the plan to

fix problems and make your business

more profitable.

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Despite the excitement that day

trading can generate it is not a trip to

the casino.

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So the first of our three big day

trading mistakes to avoid is treating

your business like sequential trips to

the casino.

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Unlike the casino the stock market,

Forex market and commodities

market are not stacked against you.

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Learn the fundamentals that drive

prices and learn to do technical

analysis of stocks in order to

successfully predict short term price

movement.

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Do not stay in a trade when you do

not understand what is going on.

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And, most importantly, go to work

every day.

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Attend seminars about trading. Pay a

coach for help if you need it.

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And keep track of profit and loss as it

relates to the time you spend trading.

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After all the point is to make money

than at your day job!

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Realism versus Fantasy

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There are times when it is possible to

make an absolute killing in a single

trade on a single day.

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But the second of three big day

trading mistakes to avoid is the belief

that a single big win in the market is

what it is all about.

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A long time ago we wrote an article

entitled Trading a Disaster about

trading in regards to the BP oil spill.

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If you are at the trade station when

this sort of news hits it might be

possible to make a lot of money.

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But, you need to understand the

range in which the stock in question

usually trades and you need to know

or find out in a hurry how badly such

an event will hurt the stock.

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Chance events favor the well

prepared in day trading as in all

aspects of life.

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The vast majority of profits in day

trading come from spotting and taking

advantage of the continual stream of

small to moderate inefficiencies in the

market that occur every day.

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If you do that and your homework too

you may, on occasion, be prepared

for a huge trade when the opportunity

arises.

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Life and Day Trading

Success Are in the Details

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Successful day traders always set

their trading stops.

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A smart trader will always let a winner

run, continually resetting upper and

lower sell orders.

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But, a smart trader has a set of rules

for getting out of a trade.

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Obviously setting stops to close to the

current price ensures that normal

static of trading will take you out of the

trade almost instantly.

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And setting the lower stop too far

down may allow you to lose an

unnecessary amount before exiting

the trade.

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This is a skill set that develops with

time and not learning it is the third of

our three big day trading mistakes to

avoid.