The reason why everybody fails at daytrading and you will not
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When studying for a length of time, it is not uncommon for students to begin their hunt for the "holy grail". They begin to hunt for more indicators, graph or chart patterns, gurus, alert services or the newest top secret trading strategies as well as many other things that can provide their solution to becoming successful. But here is the truth. Success lies inside you .. and it won't come easy.Believe it or not, one of my personal success principles is this:
"Successful people do what unsuccessful people are unwilling to do."
Let me implement this to trading in the form of my list of daytrading rules to Live by,. all of these have to do more with you as compared to the market.The consistency you need is in your mind, not necessarily in the market. Many people on the market get irritated because the market typically behaves in different ways than they expect. You can't count on the market to be consistent. It's largely a random walk. But occasionally the marketplace does setup with a probability scenario that provides you an edge. Your job is be consistent in trading all those probability setups and trade them always when they occur.Trade like a cat. Nearly all first-timers over trade. It's one of the most common trading sins. Your task is to be greater than other daytraders in having the discipline to wait like a cat in the bush until the perfect moment (your high probability setup) and then jump on the trade with no reluctance.Successful trading is just a game of not making mistakes. Keep a listing of your daytrading rules posted on the wall or on your screen and then follow all those principles perfectly. You will need to be more self-disciplined than the average trader. Never depart from the rules no matter how good a trade "looks" or "feels" to you when it violates your objective and back-tested rules.
Only trade when you are in an ideal emotional state. Do not ever trade when you're exhausted or are in an psychologically unstable situation (right after a fight with the spouse or friend for instance). Day trading is more like athletics than academics. Trading on an extremely short time frame requires you to be capable of making split second decisions, and you are endangering a lot of cash once you do. Make sure that your mind is sharp and your emotions are centered.
Maintain an elaborate trading journal. Every day trading course I've come across has a trading diary. Yet my personal experience with dealing with trading students shows that less than 10% of them actually use it. This is a huge mistake. Not only is it best to log every trade, but you also need to record the feelings you had and everything you were thinking as you took the trade. This way your logs will end up as a type of "biofeedback" mechanism for you. Personally, this was the difference that made a huge difference for me.
These 5 day trading investing principles are not the type of guidelines that you were probably looking for. The wider public is looking for rules about indicators, price bars, where you get in and where you get out. Granted, you certainly need clear objective guidelines about those things as well. Yet countless traders have those kinds of rules, but continue to crash because these rules are about market action.They crash because they do not have, or never stick to, the more essential rules are the rules about their own actions.If you find yourself resisting the value of these rules about your personal behavior, realise that you are among the masses who feels the same way. But since the masses fail at daytrading, you must set yourself apart and act different than them.Following these 5 daytrading principles are what the retail traders fail to do. Not because they can not do them, but because they are unwilling to do them. Don't forget, "Successful people do what unsuccessful people are unwilling to do."
About the Author
If you'd like to find out more about day trading read this article from Rob Wessels or look at the site of Rob Wessels Cursus.
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