WORDS OF WISDOM FOR THE DAY : Making Money From Day-Trading In the Stock Markets....!

WORDS OF WISDOM FOR THE DAY : Making Money From Day-Trading In the Stock Markets....!

 

Some experienced traders dogmatically assert that nobody makes money day trading. That is probably because they have tried, failed, and found some other trading style that suits them better. There is no doubt that day trading is a tough, competitive business, but the good news is that if it is your dream, it can be made to work for you. Successful traders specialize in a trading niche which suits their temperament. In the process of doing this they may try different vehicles and strategies which are unsuccessful (for them). This is usually because the strategy is unsuited to the trader, not because it is "bad". 

 

Do NOT decide on a market before you decide on your trading style. Find the style that suits you, then find the markets that respond best to that trading style. Successful day traders should:

 

* Learn the concept of support and resistance in a market.

* Develop a trading system based on tactics at support and resistance levels.

* Test the system on independent data to make sure it has a positive Expectancy.

* Learn money management techniques to prevent taking on to too much risk.

 

Day trading often involves regular repetition of a simple trading plan to place high probability trades. If you learn the principles outlined above, stick strictly to your plan, and learn to avoid mistakes made in the heat of the moment, you are well on the way to day trading success. Most day trading is done by professional traders who experience lower stress levels than you because they are using bank funds. You have to beat them at their own game despite the additional anxiety of having your own money at risk!

 

Two cardinal sins for a day trader are trading without a plan, and over-trading. You must have a plan which dictates your every move in the fast paced cut and thrust of a market session. Otherwise you will be a victim of bad decisions driven by emotions, the downfall of many a trader!

 

Over-trading often arises because you experience a loss and try to get it back by taking an unplanned trade. Very often, you end up making a bad day into a disastrous day. Sometimes people over-trade because they feel the more trades they take, the more money they make. In fact, all they are doing is building up huge trading costs which make it very difficult to make a profit.