Day Trading Tips to Turn Amateurs Into Pros
Day trading can be a thrilling way to make money. But it’s 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 to 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.
Many people are drawn to day trading because of the excitement of the business and the potential for big, fast profits. This attitude sets up the trader for failure. Day trading does not have the frantic energy of a video game. Most successful day traders sit by the sidelines for long periods of time simply waiting for a high-probability setup to occur. The pros trade much less frequently than the amateurs think.
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.
Therefore there are 2 times to trade when you can put statistics on your side:
When a new trend is just starting.
When a trend has run its course.
Trading only at these 2 times allows you to put the statistics of the “edge” of the bell curve 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 day trading tips but do exactly the opposite of what you hear!
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.
The vast majority of the time they were dead wrong 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.
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 such as: “The market can’t go any higher than this.” “This market just has to turn around at this point.” “The market is definitely way over-extended now.”
It is absolutely amazing to see how amateurs habitually trade against the trend in an effort to find tops and bottoms. They are constantly looking for the market to turn around. As is always the case, you can profit tremendously by taking the other side of their trades.
Day trading can be extremely rewarding, but to be successful you must stand aside 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 succeeds.
Source by Dr. Barry Burns