What successful day traders shouldn’t do?

successful day traders

One emotion which most day traders are well acquainted with is greed. All of us can’t resist the temptation of getting rich with just one trade. But this kind of thought process results in loss of huge amounts of money and ultimately ruins the career of the day trader. In this article we are going to discuss some of the things which successful day traders should never consider doing.

Once you get familiar with the pitfalls of day trading then you can avoid them easily. Minor mistakes like entering the wrong stock symbol or faulty set up of buy level is not uncommon. These are forgivable mistakes which can even bring you some profits. The kind of mistakes which should be avoided by day traders relates to misjudgements rather than minor errors. A bad judgement is a deadly mistake which can even ruin your career as a day trader. Therefore one has to keep a close watch on himself and stay alert at all times.

Try to think of trading mistakes like driving on dangerous icy roads. Once you know that driving on such ground is dangerous you can avoid the danger altogether by not driving during a sleet storm. While not knowing about the dangers of sleet storm would make you drive on ice without realizing the threat and you only get to understand your mistake once you are on the road.

All of us are tempted at the prospect of making easy money in one go but that can lead to your ruin. Wanting more money is not the danger but trying to realize maximum profit in one stroke is potentially dangerous. Many day traders want to get rich with just trade and that is the reason they end up disastrously.

A day trader becomes successful through consistency. There are many newbie who think that they can become a millionaire with just one superb trade and they won’t need to work again for the rest of their lives. This kind of ambition can ruin one’s career. The only way to make a fortune in day trading is consistency. Know that your fortune would only be made in small amounts. Trying to go for big wins would only lead to more losses.

The expectation on part of the traders of a huge profit for each trade does make sense. When told to choose between a $5 bill and a $100 bill, the choice is obvious. But in day trading the options are not that simple. Since if you don’t choose that $5 then you might have to dole out $100 from your pocket. Therefore one should bear in mind that even if he cannot take the $100 bill right away, he can do so in 20 instalments.

Always remember the day trading rule that small but steady profits would add up gradually. This doesn’t necessarily imply that you won’t ever get to be a winner. Profits of 100%, 200% or even 1000% are not uncommon in options trading. But this level of profit is not something one can count on. If one expects these kind of numbers all the time then be sure to be disappointed if not ruined.

Small but consistent profits are the key to the success of day trading. One should know when the right time to exit with a profit is. Always keep away from the temptation to stay in a little longer for a little more profit.