Day trading can be an exciting way to make money. But it is more challenging than most beginners think. Here are some day trading tips that can help the new trader, as well as the more advanced trader, reach their goals faster.
First: Be careful not to over-trade. Most of the time, the market is a random walk, which means that it moves without rhyme or reason. Amateur traders who take small positions in the market are behind these unpredictable moves.
These fans do not affect the long-term movement of the market. The professionals, with their high volume and willingness to hold positions longer, are the ones who create sustainable moves in the market that can lead to significant profits.
Many people are drawn to day trading because of the excitement of the business and the potential for big, quick profits. This attitude sets the trader up for failure. Day trading doesn’t have the frantic energy of a video game. The most successful day traders sit on the sidelines for long periods of time just waiting for a high probability setup to occur. Professionals trade much less frequently than amateurs think.
Second: The trend is your friend… sometimes.
The truth is that the trend is a friend of good weather!
He is your friend from the beginning. But trends run out.
So there are 2 times to trade where you can put stats on your side:
When a new trend is just beginning.
When a trend has run its course.
Trading only these 2 times allows you to put the bell curve “edge” stats on your side. Trading in the middle of a trend puts you solidly in the middle of the bell curve where anything can happen.
Third: Join free trading rooms for daily trading tips, but do the exact opposite of what you hear!
I have participated in many chat rooms over the years and have received tremendous benefit from them. But the benefit did not come from listening to the teacher. He came from seeing the comments of the participants as they shared what they were doing at any given time in the market.
The vast majority of the time they were dead wrong in their approach.
They reveal the mind of unprofitable retail traders. It is almost unsettling how amateurs think alike when it comes to trading the markets. If you listen to them long enough in the trading rooms, you will begin to notice patterns in the things they do on a consistent basis. Do the opposite and win.
As an example, one of the most common problems amateur traders have is resisting the urge to fight the trend. You’ll often hear comments like, “The market can’t go higher than this.” “This market just has to turn around right now.” “The market is definitely overextended now.”
It is absolutely amazing to see how often amateurs trade against the trend in an effort to find tops and bottoms. They are constantly looking for the market to change. As is always the case, you can benefit greatly by taking the other side of your trades.
Day trading can be extremely rewarding, but to be successful you need to stand apart from the masses and avoid the herd instinct that drives so many. These 3-day trading tips can help you be among the minority who succeed.
