Most people looking to make money in the markets believe that the answer lies in finding some simple technical analysis strategies that will catapult them to profitability.
The truth is that trading is not as simple as beginners believe. It is a profession, and like any profession it requires a learning curve. Reading a book or getting a few simple “tips” is not going to turn you into a professional trader.
After studying for a length of time, it’s not uncommon for students to begin their search for the “holy grail.”
They search for more indicators, chart patterns, gurus, alert services or the latest secret day trading strategies and other things that will provide their answer to becoming successful.
But here’s the fact. Success lies within you .. and it won’t come easy.
In fact, one of my favorite success principles is this:
“Successful people do what unsuccessful people are unwilling to do.”
Let’s apply this to trading in the form of my list of “Day Trading Rules to Live By” … all of which have to do more with you than with the market.
- The consistency you need is in your mind, not in the market. Many in the market get frustrated because the market often behaves differently than they expect. You can’t rely on the market to be consistent. It is largely a random walk. But there are times when the market does setup with a probability scenario that gives you an edge. Your job is be consistent in trading those probability setups and trade them every time they occur.
- Trade like a cat. Most beginners over trade. It’s one of the most common trading sins. Your job is to be better than other day traders in having the discipline to wait like a cat in the brush until just the right moment (your high probability setup) and then jump on the trade without hesitation.
- Successful trading is simply a game of not making mistakes. Keep a list of your day trading rules posted on the wall or on your monitor and then follow those rules perfectly. You must be more disciplined than the average trader. Never depart from your rules no matter how good a trade “looks” or “feels” to you if it violates your objective and back-tested rules.
- Only trade when you are in an optimal emotional state. Never trade when you are tired or are in an emotionally unstable situation (after a fight with a spouse or friend for example). Day trading is more like athletics than academics. Trading on such a short time frame requires you to be able to make split second decisions, and you’re risking a lot of money when you do. Make sure your mind is sharp…