If you put on a trade and your heart starts pounding, you are *not* ready to trade yet...Some people who aren't ready to trade have other problems as well: Pulling the trigger to get in. Staying with one trading strategy long enough to judge it. Letting good trades go bad. Day trading psychology plays a role in these issues, and books have been written to help traders deal with these problems, but most of them do not offer a practical solution.
Day traders can be grouped into two broad categories as scalpers and momentum traders. Scalpers trade in large quantities completing each trade within seconds or minutes. Most scalpers are usually large financial firms or investors like institutional traders. Momentum traders are usually individual traders who trade according to the stock market trends. The trading volume of momentum traders usually depends on the market condition. Some other popular trading strategies include range trading, news playing and rebate trading.
Day trading psychology involves building confidence, and consistent, profitable results will lead to confidence. Being a 27+ year veteran trader, my day trading advice for you would be to trade your strategy in simulation mode so that you can judge it rationally. The inexperienced trader (and even some traders with years of experience) has a difficult time thinking rationally when they are afraid of losing money, so take that fear out of the equation by utilizing simulation trading as a tool.
Some "professional" traders will tell you that simulation trading is useless or even, "the worst thing you can do." But it depends on why and how you utilize simulated trading. If you choose a simulation strategy that has a defined number of setups, a fairly specific strategy for limiting losses, and you stick to that strategy like glue, never deviating from it - then simulated trading is a logical way of testing your method in real time and it will help you greatly. Day trading psychology also involves self control. Cultivating good habits such as self control, and developing confidence while using a simulation method will help you when you're ready to trade for profit.
Having confidence in a method you have traded in simulation mode is the most rational starting point for a new trader, or any struggling trader. So begin the successful part of your trading career with a strategy that you personally have learned to trust through real-time trading (preferably simulated trading). Not all trading strategies are alike when it comes to day trading psychology, and this is important to understand.
Any strategy that loses more than 60 % of the time (such as a trend-following system) will take enormous courage to trade, no matter what you do. These strategies demand a certain type of person (rich, with ice water in their veins). Thousands of strategies force you to place a fixed stop and wait to see if it gets hit. These are difficult to trade with confidence - even IF you can find one that wins more than 65 - 70% of the time and makes money in the process. That's a big IF. You can spend a career and thousands of dollars searching for success with this kind of strategy, most unfortunately end in failure.
Day traders can be grouped into two broad categories as scalpers and momentum traders. Scalpers trade in large quantities completing each trade within seconds or minutes. Most scalpers are usually large financial firms or investors like institutional traders. Momentum traders are usually individual traders who trade according to the stock market trends. The trading volume of momentum traders usually depends on the market condition. Some other popular trading strategies include range trading, news playing and rebate trading.
Day trading psychology involves building confidence, and consistent, profitable results will lead to confidence. Being a 27+ year veteran trader, my day trading advice for you would be to trade your strategy in simulation mode so that you can judge it rationally. The inexperienced trader (and even some traders with years of experience) has a difficult time thinking rationally when they are afraid of losing money, so take that fear out of the equation by utilizing simulation trading as a tool.
Some "professional" traders will tell you that simulation trading is useless or even, "the worst thing you can do." But it depends on why and how you utilize simulated trading. If you choose a simulation strategy that has a defined number of setups, a fairly specific strategy for limiting losses, and you stick to that strategy like glue, never deviating from it - then simulated trading is a logical way of testing your method in real time and it will help you greatly. Day trading psychology also involves self control. Cultivating good habits such as self control, and developing confidence while using a simulation method will help you when you're ready to trade for profit.
Having confidence in a method you have traded in simulation mode is the most rational starting point for a new trader, or any struggling trader. So begin the successful part of your trading career with a strategy that you personally have learned to trust through real-time trading (preferably simulated trading). Not all trading strategies are alike when it comes to day trading psychology, and this is important to understand.
Any strategy that loses more than 60 % of the time (such as a trend-following system) will take enormous courage to trade, no matter what you do. These strategies demand a certain type of person (rich, with ice water in their veins). Thousands of strategies force you to place a fixed stop and wait to see if it gets hit. These are difficult to trade with confidence - even IF you can find one that wins more than 65 - 70% of the time and makes money in the process. That's a big IF. You can spend a career and thousands of dollars searching for success with this kind of strategy, most unfortunately end in failure.
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Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Payday Loans - Everything You Have To Know! You have full permission to reprint this article provided this box is kept unchanged.
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