Free Investment Advice

Here are some more advanced day trading tips from tradethemarkets.com:

1. The stock market reinforces bad habits. If early on you held onto a loser that went against you by 20%, and you were able to get out for break-even, you are doomed. The market has reinforced a bad habit. The next time you let a stock go against you by 20%, you will hang on because you have been taught that you can get out for break-even if you just be patient and hang on long enough. Tell that to the folks who while online trading bought VERT at $145. When is it going to get back to break-even? Well, if your timeframe is never, then you have nothing to worry about. Control your risk by sticking to your stops.
2. This next bit is brutal, but true. The true mark of an amateur day trader who is never going to make it in this business is one who continually blames everything but his or herself for the outcome of a bad trade. This includes, but is not limited to, saying things like:
   • The analysts are crooks.
   • The market makers were fishing for stops.
   • I was on the phone and it collapsed on me.
   • My neighbor gave me a bad tip.
     The message boards caused this one to pump and dump.
   • The specialists are playing games.

   The mark of a professional, however, sounds like this:

   • It is my fault. I traded this position too large for my account size.
   • It is my fault. I didn’t stick to my own risk parameters.
   • It is my fault. I allowed my emotions to dictate my day trading.
   • It is my fault. I was not disciplined in my trades.
   • It is my fault. I knew there was a risk in holding this trade into earnings, and I didn’t fully comprehend them when I took this trade.

   The obvious difference in day trading is accountability. For amateurs, everything having to do with the market is “outside their control.” That is not reasonable thinking, and really just points to an individual who has, probably for the first time, had to confront their “real self” as opposed to the perfect self or idealized self they have constructed in their mind. This is also known as “living in a fog.” A person can drift around through life in their own private world, where they are pretty special and can do no wrong. Unfortunately, online trading rips off this mask, because you cannot dispute what has happened to your trading account. This is also known as “confronting reality.” For many people, when they start trading they are suddenly confronting reality for the first time in their lives. Just to see the world as it really is requires a lifetime of training, and for many people trading the stock market is their first real step in this journey. Some people say that traders are born, not made. Not so. If you choose to see the world as it is, then you can start trading successfully tomorrow.

3. Amateur online trading traders always think, “How much money can I make on this trade!” Professional traders always think, “How much money can I lose on this trade?” The trader who controls his or her risk takes money from the trader whose head is in the clouds.
4. At some point day traders realize that no one can tell you exactly what is going to happen next in the market, and that you can never know how much you are going to make on a day trade. Thus the only thing left to do is to determine how much risk you are willing to take in day trading in order to find out if you are right or not. The key to trading success in day trading is to focus on how much money is at risk, not how much you can make.