Day trading is not Day dreaming..!
90% of all day traders fail in stock market." bitter truth But how many of them give serious efforts to earn in day trading? How many of them give as good input as they give for any other business? How many of them treat it as full time business and not as a refreshment break? Well, you may find your answer in rest 10% people who doesn’t fail in day trading.
“90% people do not make money in day trading!!!”
Most of the people think, it is one of the easiest jobs one can have. Myth! If you think that day trading is “easy money” then I will request you just take all of your savings and light it in a bonfire as soon as possible. It will be much less painful for you. Someone told me on my very first day of day trading that no one can earn in day trading. After trading for some years in this market i would like to ask that person, have you ever thought why most of the people in day trading don’t make money? Most of our “why” can be answered if you ask “why not”! We will try to find out answer for “why not” in this article.
“90% of all day traders fail in stock market.” bitter truth But how many of them give serious efforts to earn in day trading? How many of them give as good input as they give for any other business? How many of them treat it as full time business and not as a refreshment break? Well, you may find your answer in rest 10% people who doesn’t fail in day trading.
Failure is part of life. Agree. But if you do not learn from your failure… it becomes your life! There are some common certain characteristics of such failed stock traders. Let’s have a look at them.
1. Opportunity cost is high:
Golden rule: if you are switching your business to day trading then you should have 9 months back up amount in your bank locker for survival if you do not earn a single penny in next 9 months.
2. Lack of professionalism:
People become lazy when they think trading is easy. I would say trading is not easy. Even if you have the best guidance in stock market you should give your efforts too. when you have some consultant in stock market you are buying professional service from them, they will give you 80% of your requirement for making profit, but rest 20% you have to give if you really want profit from day trading. As per my knowledge you should give at least 3-4 hours for your homework before clicking any trade on your keyboard. I would like you to read the last line again.
Golden rule: Don’t get into day trading if you aren’t prepared to treat it seriously.
3. Lack of system:
When day trader enters trading room most of the time he does not know what will he do after 10 minutes. He does not have any system to work upon. He will sit in chat room and he will trade on “tip” or he will simply follow what other people will do. It can be very dangerous as he does not even know where he will reach at the end. Do not forget to analyse your trade every day. Be critical of yourself. Analyze your trades and find the reason why you made them. Do your profit / loss numbers each month. What’s working? What isn’t working? Do you need to change your plan?
Golden rule: Make some rules and develop a system for yourself and work within that system.
4. Ignoring tools of trading:
If you are going to be a successful trader, then you need the proper tools. Proper computer setup, proper phone line set up, good Internet service provider, proper charts setup. This is a business, and you need to invest in yourself in order to be successful. Your chair should not be in bad shape, your computer system should not have any virus, your room when you trade should not have any disturbance. Remember, your mind is your asset when you work as a day trader. If you ignore your comfort levels, it may cost you very high. You can surely perform better if you treat yourself better during market hours.
Golden Rule: Update your tools every weekend.
5. Lack of Schedule:
Golden rule: Plan to be at your desk one hour before the market opens and one hour after it closes.
6. Lack of confidence:
Well, have you ever thought about your non performing trades? More than 50% of our non performing trades are due to lack of confidence. When you trade, make yourself very clear about that trade. It should have fixed stop loss, fix target, time frame,investment, maximum return, maximum loss and weight of the trade on your total volume of the day. It will give you very clear picture about the end position of the day. When trader doesn’t know what will happen to him if trade goes right or wrong he feels panic easily and can do wrong trade. Again i would say do not forget to analyse your trades. It will show where you went wrong and what works for you.
Golden rule: Make your daily budget before you start trading. You should know how much turnover and how many trades you will do on particular day
7. Lack of safety net:
You need to be able to trade without thinking about how you are going to pay your kid’s school fees. Most of the traders do not have such safety net. You need at least nine months worth of expenses set aside. If you are 100% depended on your income from stock exchange it will completely affect your confidence and negatively impact your returns.
Golden rule: Prepare yourself. Prepare financially, prepare mentally.
This post is Collected From other Website(i posted it just for knowledge purpose)
