Day trading can be a fun and exciting way to make money. But it’s more difficult than most beginners imagine. Here are some day trading tips that can benefit the new trader as well as the more experienced trader to help you achieve your goals faster.
First: Be careful not to over trade. The majority of the time the market is a random walk – meaning that it’s moving without any rhyme or reason. Amateur traders taking small positions in the market are behind these unpredictable movements.
These amateurs do not affect the long-term movement of the market. The professionals, with their large volume and their willingness to hold positions longer, are the ones who create sustainable moves in the market that can provide meaningful profits.
Some people are attracted to day trading for of the excitement of the business and the potential for fast money. This attitude sets one up for disappointment. Day trading does not have the energy of a video game. Professional day traders stay on the sidelines for waiting for a high-probability trade to set up. They trade less frequently than the amateurs believe.
Second: The trend is your friend … sometimes.
The truth is that the trend is a fair weather friend!
It is your friend early on. But trends get run out of steam.
There are 2 times to trade when you can put stats on your side:
When a new trend is just starting.
Late in an old trend.
Taking positions at these 2 times put the stats of the bell curve on your side.
Third: Listen to free chat rooms for day trading tips and do exactly the opposite!
I’ve participated in many chat rooms over the years, and have received a tremendous benefit from them. But the benefit did not come from listening to the teacher. It came from watching the comments of the participants as they shared what they were doing at any given time in the market.
As you may guess, the majority of the time they are completely misguided in their approach.
They reveal the mind of the unprofitable retail traders. It’s almost eerie how the amateurs think alike when it comes to trading the markets. If you listen to them long enough in the trading rooms you’ll start to notice the patterns of the things they do consistently. Do the opposite and win.
One of the most typical errors I find people do in the rooms is trade against the trend. You hear the same comments over and over: “This market can’t go any higher now for sure.” “It definitely has to turn around here now.” “OK, the market is now way over-extended.”
It seems to be hard wired into the brains of retail day traders to trade against the prevailing energy of the markets and try to find the top or bottom. You can make a lot of money trading against them and doing exactly the opposite.
Day trading can be enjoyable and financially beneficial. To be a success, however, you must avoid the herd and stand apart from the masses who lose their money. Employ these 3 day trading tips to put you squarely on the path to profitability.
Author: Dr. Barry BurnsThis author has published 1 articles so far.