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Day traders have a tough but exciting job. While it can be tough to
battle the stress and the occasional losses, stock market trading is
always stimulating and intellectually engaging; at least, that’s how
most traders feel. For day traders, too, the thrills and spills of
trading are simply accentuated by the time pressures to act only during
day trading hours. Particularly for those who love stress and thrive
under pressure, day trading can be a dream job.
But how do you know if day trading is right for you? Are you up for the
challenges it presents as a career? Is your current financial position
strong enough to handle the waves and troughs of day trading? Are you
emotionally prepared to maintain a poker face and stick to your plan of
attack when things aren’t going your way?
All traders worry about their work. If you are worried about the
prospect of day trading, intimidated by the fact that most day traders
lose money in the beginning and that overall, less than half who try
this end up losing?
What seems to make a good day trader: managing fears and anxieties. Now
is as good a time as any to start this practice of controlling your
emotions. Approach day trading as you might approach poker online, with
an eye to win.
It’s a fairly astonishing fact: online poker is a world filled with
losers, dominated by them. The reality is: people are thrilled by the
idea of winning millions at something like this, whether it’s poker or
day trading. They see or hear about someone, a regular Joe, who made a
fortune playing or trading. The few success stories you hear about, the
successes make it look effortless. Chris Moneymaker, World Poker
Tournament Champion, makes poker look effortless. Most people seem to
assume: if it looks effortless, it is effortless. In reality,
appearances are deceptive.
You can make a living as a day trader. Almost anyone can. The clincher
is nothing to do with the stock market and probability that you’ll lose
out simply because you’ll be unlucky. Even in a game like poker, luck
has little to do with who wins and who loses. What really matters in
day trading is the ability to control your emotion – approach day
trading as a job and don’t become emotionally attached.
Fear of loss could make you hesitant to make a trade. When you let the
fear of loss hold you back, you also lose confidence in your ability to
execute a trading plan. You stop trusting in your method and your
ability to execute future trades.
Our minds automatically avoid pain; our brain is programmed to the
fight or flight mechanism when things start to threaten us, either
emotionally or physically. New traders in particular have trouble not
associating a trade with a potential loss
that can cause financial or emotional pain, particularly when they have
already suffered a loss or two.
If you want to be a trader, you need to see that trading is a game of
probability. Understand this before you start and program the knowledge
into your emotional psyche. When you lose money, the loss isn’t about
being wrong or right. You’re trading to make money and sometimes, you
have to lose some to win. If you played tight poker all the time, you
wouldn’t lose but you’d almost certainly never win.
What makes a good day trader?
• An Analytical Mind – You have to process a lot of information as a
trader. If you like analyzing problems and situations, looking for
trends an anomalies, day trading is a great job for you.
• Level-headedness – Confidence might even be the right word. It’s a
tough call. You need to be rational and thoughtful about the decisions
you make. You need to control your emotions most of all, or at least
not react to them, which means fighting against your natural makeup.
• Patience – Making money takes time. The get rich quick schemes you
come across – day trading isn’t one of them – are probably scams.
Anyone who says they got rich overnight and that they made no effort to
do so, their either lying or they’ve completely forgotten all the hard
work they had to do.
• Consistent – To win as a day trader, you need to follow a strategic
plan. You need to follow it, for the most part, even when it looks bleak
or things just aren’t going your way. In fact, it’s those times that
your plan matters the most and most people make the mistake of thinking
that when things are going really bad or really well is when they
should improvise and think on the fly. Not so.
• Avoiding the Perfectionist Mentality – If you have a perfectionist
mentality, you are setting yourself up for failure when it comes to
trading. You will experience losses along the way when you’re trading.
It’s a probability game, which means, at some point, you have to lose.
You can’t be a perfectionist and a great trader. That never works. As a
day trader, your objective should be excellence in trading, not
perfection.
• Only Trade If You Enjoy It - Some people really aren’t meant to be
traders. It’s not that they don’t have the raw ability to do the work,
it’s generally that they aren’t the right sort of person; their
personality isn’t suited to trading. Some people who like trading don’t
like the fast-paced activity of day trading. They prefer a slower
market and they perhaps like to hold on to stock and watch it mature.
That’s fine. There’s nothing wrong with it. Know your personality, your
strengths, and your limitations. Find the market that suits you.
• Give Care and Attention to Your Start-Up - You need to have the best
possible resources to work with. Research your options for trading, the
companies you can work with, the different plans they offer. If they
offer advice or tutorials, it’s a good idea to have your hand held in
the beginning.
What makes the best trader is a willingness to learn. If you decide to
go into day trading, then this should not be the first time you read
this book. Nor should this be the only book you read. Not by a long
shot.
To make good money day trading and to become very skilled at the job,
you need to continue your education well beyond this point. A great
truism: Only perfect practice makes perfect. The more you study the
market and trading, the better you will be at your job.
Note:
After you sign up for this package, you
will need to confirm your request to receive your free day trading
checklist report. This is done by clicking on a
confirmation link in an email that will be sent to the address you
enter above. The subject of this email will be: "Confirm Your Request For
Information"
If
you do not
confirm your request, you will not get your free report
The information
in this guide and on this
site should not be construed as financial advice and are for
information purposes only. The authors and publishers are not financial
advisers. You should rely on your advisers and lawyers for financial
advice.
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