Some facts about day trading I

truth.jpgI have been day trading for quite a while. I am not a pro. But I guess, I can share a little bit about day trading. Since my friend , Faith Lu, a young gentleman from China, is keen to learn all about trading, I guess this might be a little helpful to him. Remember, these are not the rules, just some observation from experience.

  1. You are a day trader, not analyst. All you need to know is basic Technical Analysis, be cool, and trust your instinct. Bull shit? I don’t think so. You don’t have to be a master technical analyst to day trade. All you need to know is just drawing trend lines, understand what is Moving average, reading market volume, that’s it! What else do you need? Detailed market analysis are for gentlemen who get paid by writing reports, but not trading. Your job is to start the day with cash and end the day with more cash. Thinking too much is not helpful.
  2. Know a little bit about mathematics. Hold on, don’t be panic. I know you hate this. All you need to know is the meaning of Probability. You will never know what is going to happen at the right side of your chart. We are playing with probability. Most of time, it is 50:50. So, bear in mind that, we want to earn $1, but with only potential loss of $0.5. When market is moving in our favor, let it run, otherwise, leave, please. You don’t need a degree in Mathematics from Standford university to know, risk $1 to earn $0.5 doesn’t work in long run.
  3. Day trader does not need to trade every day. Got it? If you’ve just pocket $1000 today, do not expect to earn another $1000 tomorrow. Everyday is a new day. There are days that you just can’t trade. If you are not into trading news, then do not try to trade during big announcements like Non Farm payroll, or Interest rate statement. These are the days that we enjoy fishing or jogging in the park. Day trading is just like doing your own business. We do not need to sit in the office everyday.
  4. Day trading is a mind game, and a decision making task. Make sure you are in good condition mentally before start trading. It is a damn bad idea to trade right after fighting with your spouse. You’ve to make decisions when trading, you need a clear mind for this task. So if you are not ready for the task today, then come back tomorrow.

Day trading is a business that allows you to earn a living. But if you are planning to start day trading and earn a million-dollar bungalow next year, you need to see a psychiatrist. 😆

Do you still have something to add on? Shoot me a comment.

About Gav

A Father, Husband, Trader, and Blogger. A serious coffee addict. Started trading since 2005, trades Futures and FX.

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Comments

  1. Bill Henner says:

    Hi Gav,

    A lot of recent buzz over this system. Take a look and let me know what you think.

    http://www.indexfx.com/profile_detail.php?id=59

    Bill

  2. Bill Henner says:

    Hi Gav,

    A lot of recent buzz over this system. Take a look and let me know what you think.

    http://www.indexfx.com/profile_detail.php?id=59

    Bill

  3. I know #3 is a big problem for me, especially on days when the market makes a big move. I know I get that feeling that I’m missing out on things and start forcing trades.

  4. I know #3 is a big problem for me, especially on days when the market makes a big move. I know I get that feeling that I’m missing out on things and start forcing trades.

  5. Interesting insights. I would agree with you about #3, however at the same time I do believe everyday is a profitable trading day, provided you have an adequate system and you keep yourself focused in the present moment to be active on all your systems edges.

    Thanks for the great post and remember to have fun day trading!
    http://evolvedtrader.com/

    Ryan

  6. Interesting insights. I would agree with you about #3, however at the same time I do believe everyday is a profitable trading day, provided you have an adequate system and you keep yourself focused in the present moment to be active on all your systems edges.

    Thanks for the great post and remember to have fun day trading!
    http://evolvedtrader.com/

    Ryan

  7. I found this handy guide, see if it is useful

    ww.lemonshell.com/wealth/daytrading.aspx

    Regards

  8. I found this handy guide, see if it is useful

    ww.lemonshell.com/wealth/daytrading.aspx

    Regards

  9. great blog. i spent te last 9 months in a cave learning to trade. its indeed what you said. 🙂

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