Are You a
Newbie Trader?
Day trading
online is not an easy profession. You might be stuck in one of the common
pitfalls that often devour newbie day traders. Find out if you are still a
newbie trader.
- The Gut Trading Indicator: When you are day trading, you
use your gut feeling instead of calmly assessing trading market conditions
using technical indicators and trading software and selecting high
probability day trades.
- The Gold Rush: You think day trading means
that you can make a lot of money in a short amount time.
- Day Trading the News:You are glued to CNBC for
your next day trading stock tip. CNBC has a very specific job: To provide
enough entertainment to viewers so they tune in and watch. With a lot of
people watching, they make more money from the commercials. It's as simple
as that. CNBC is fun to watch, and when things get serious; they do a
great job reporting. You cannot make a living "trading the news"
off of any financial news channel. By the time it appears on
television, it is way too late to react. Trading floors have already
heard the news and by the time it makes it to the public they are closing
their positions, ideally to suckers who just saw the headlines, the news
does not provide day trading tips.
- Trading Market Chaser: You continue to chase the
trading market. If a certain trading price is going up and the puts are in
a long position. Suddenly the trading price pulls back, you start to get
nervous and get out of the day trade with a 20 pip loss. All of a sudden,
the trading price resumes it seems like an uptrend. You think, "Wait
a minute this is easy, I was right all along." You add in a second
long position to try and make up for the 20 pip loss. You are hoping to
make a profit. Well, guess what, the price doesn't up, it pulls back, and
ends at a 25 pip loss. Your day trading P&L for the day: -45 pips.
- Day Trading Slacker: You do not do you homework
before the next day trading session begins. You do not examine the charts
from all time frames; you do not understand the direction of the overall
market trend. You have no idea if employment numbers are about to be
released or any other announcements so that you may prepare to handle the
trading market correctly.
- The Player: You have indicator commitment issues. You
jump from one trading indicator to another. Sure you know little about
them all, but you don't know a lot about any specific indicator. Therefore
you have no idea which indicator fits your personality and day trading
style the best.
- Day Trading Overachiever: You day trade way too much.
You trade multiple lots and you think that it will result in a big pay off
at the end of the day.
- Day Trading Cowboy: You continue to think that
you can learn by day trading by yourself, you will find the secret code,
crack this system, become a billionaire and fly away to Tahiti.
Trading is a profession. Most successful traders learn from a day trading
mentor, someone who is already a professional and a successful day trader,
usually with years of experience. If I wanted to be a doctor, I couldn't
just watch an operation on TV and expect to succeed when I tried my next
angioplasty. Why should trading be any different from any other
profession
