I often wish I could go back in time and prevent so many costly mistakes I made as a newbie in day trading career. Unfortunately, there is no way to go back and change the mistakes I made, in fact if you try to dwell on these mistakes it will prevent you fro succeeding. If you apply a humility, you can learn a lot from a mentor like me who has been trading for over 20 years.
There is no way to avoid losing money just by reading some of these key lessons I learned , but if this can help one person to avoid making these costly mistakes that I went through then this article was wroth it.
These are some mistakes I would make that I felt compelled to share, hope it helps!
Focus on Day Trading first and foremost and success will come...
When most traders begin trading their main goal is just to make money, and they become obsessed with this, eventually this is what leads to their downfall. Don't focus on the money focus on the trading strategies and the rest will follow. When you focus only on money then emotions grasp a hod of you and you become drunk with the losing cloud of darkness. I was their and it was horrible, until I learned to only focus on trading, then I was able to profit and never look back.
I feel that this mistake is the cause of many trading failures; being too concerned about the money that you are trading. I have seen so many traders who are very good potentially, get wrapped up in the emotions based on the fact they could not stop looking at their account balance when trading.
Your trading account performance is easily reflected in the equity performance in your account this is something most trading platform will have via real time with the click of a button. If you have a trading system where it gives you the option to turn off the money in real time its important to do so and just focus on the trade.
Performance in the account will tell the tale as to if you are using your emotions to get the best of us, of course many may not have a good strategy when it comes to day trading and therefore this may be why they fail, however for the most part its more in money management and emotions than the strategy.
The trading account performance is very important over the long term, don't focus too much on daily balances its the longer term that means the most. If you let the emotions get the best of you it will only hurt you.
Preserve capital in your account while you learn
Its common for traders to destroy their account in their early days of trading, the weird thing is this is the time that you will learn many lessons on how to day trade better, of course some traders will drop out and never trade again at this point.
You need to be sure when you trade that you trade the right setups and trade with the least amount of capital when you start trading.
Focus on different markets, Stocks, Forex and Futures
Be sure to learn about the markets in general, do not only trade Forex, learn to trade all markets, this will give you an edge since you can go into any market and make money when you become a seasoned trader.
Pick one trading strategy, master it, stick with it
Many new traders come into the markets and begin to trade live from day one, they read an article, take a trade here and there and hope for the best, this is not trading! This is wishing and hoping!
I know many of you may say well how am I to learn a strategy if I am just starting off, there are many strategies in trading, price action strategy, using moving averages to trade, pattern trading, fundamental and many more. In out trading room we use a little of everything.
You need indicators providing they work
As a new trader i tried many different strategies, fundamental, price action only, with indicators, no indicators, you name it I tried it...One thing I learned is that indicators can work, however it must be the right indicator at the right time
I have noticed that moving averages can work very well but it must be in the correct market, I have noticed that patterns work very well but it must be at the right time of the day. There is no right or way to trade, just be sure your day trading strategy works well.
Stay out of the Market when you have to
Many traders cant control the urge to trade, they must be in the markets when the news flashes or the new Forex or futures signal comes. IN our Forex Trading Room, we are sure to make every signal have an explanation as to why we took it, in our Futures trading room we do the same.
As a new trader I would trade and feel great, then trade again and again, at the end of the day I would be at break even or even down on the day because I never knew when to stop.
Make sure you know that the markets can be your friend or your worst enemy.
Know when to take a break
Its important to know when to stop trading, if you had a string of wins then be sure to take a break, if you have a long string of losers then do the same, its a stressful business and we need to calm down.
I have come across so many traders over the years that could have done so well but they did not know when to stop! So do it know when to stop!
Look at and trade what’s moving
One reason why traders lose is because they do not take the time to look at where the action is, for example I have no interest in trading a stock that has no volume, a forex pair that has no movement and a future that is not going anywhere. Be selective look for volatility and you will have opportunity.
Stick to a time frame that works for you
If someone begins it does not matter if they trade 5 minute or daily chart if they are going to approach trading with a losing mindset then they will lose. Pick a time frame that works for your personality, are you a fast paced person? Then holding overnight is not for you. Do you like to hold for days at a time? Swing trade if you have the ability to be patient.
As we know we can't change the past but each day we can get better with our day trading, and in life. Stay positive and focused.
These points I made I hope can help you to become a better trader. If you are looking for a mentor then look no further, myself a well as our small and highly trained team are here to help you day trade futures, as well as forex in our trading room.
Please feel free to leave a comment below and contact us.
- Posted by fx_Trader
- On February 21, 2020
- 1 Comments