Cash: $ 1.75
Joined: 06 Aug 2015
|10 Mistakes in Day Trading That Could Cost You Money
Learning HOW TO BE A TRADER who rapidly buys and sells the right stocks involves research, discipline, and consistency. You can protect your trading capital by avoiding these 10 common trading mistakes.
1. Trading without training.
Many short term traders lose money due to inexperience. For a firm grasp on market behaviors, get training from a trustworthy source, and practice!
2. Diving in without a life jacket.
Don’t jump into the DAY TRADING pool without a plan. You’ll need to predetermine entry and stop-loss strategies to protect your investment. Risk Management is Job #1!
3. Copying another trader.
Nobody likes a copycat, so learn to trust your instincts. If you’re gun-shy, lean on strategies from your mentor until you’re comfortable making decisions. As I like to say “Make the trade your own!”
4. Listening to the noise.
Another common mistake is focusing on rumors. Successful investors concentrate on real-time TRADING IN THE STOCK MARKET today instead of following tomorrow’s predictions or yesterday’s news. Only Price Pays!
5. Chasing a trade.
If you’re chasing quick-moving stocks as they’re rising or falling, you’re likely flushing your money down a metaphorical toilet. It is possible to anticipate movement without hitting the panic button. Anticipate all potential scenarios and PARTICIPATE only when price confirms and you have identified a stop suitable for YOUR TIMEFRAME.
6. Trading at the wrong time of day.
Trading within the first or last 15 minutes of the day is comparable to being in an Old West shootout. Avoid the chaos and let the dust settle a bit before getting involved. Missed opportunity is better than lost money!
7. Being pigheaded about cutting losses.
Stubborn traders who refuse to take small losses often incur much larger losses down the road.
8. Using margin as purchasing power.
When learning HOW TO BE A TRADER, it’s best to avoid using margin. Borrowing money to purchase securities you cannot afford is a big financial risk. When you leverage your money, you also leverage your emotions!
9. Expecting too much.
If you think trading will get you that oceanfront mansion, it’s time to lower your expectations. Avoid the urge to gamble, and concentrate on making good decisions based on YOUR PLAN.
10. Trading emotionally.
THE STOCK MARKET is like the biggest bully on the playground. If you aren’t disciplined, your wallet may be considerably battered. Technical Analysis and Risk Management should trump emotion.
SHORT TERM TRADING is not easy. The best way to pile up the profits is to develop a plan which is suitable for your timeframe and to execute it with discipline.