Day trading is exciting, exhilarating, and can be lucrative. If you know what you are doing. In today’s post we are going to cover three common beginner mistakes. These are the pitfalls that either make traders better or scare off potential traders. But we are here to help you avoid those mistakes and hit the ground running as a day trader.
Not having a strategy
There are so many momentum day trading strategies out there that there is no excuse not to have one. You can take classes, like those offered by Warrior Trading, you can read articles, and you can connect with other day traders to learn about all the different day trading strategies that are out there. Your strategy should include developing a dedicated work space and schedule; budgeting and risk allocation; and your momentum day trading strategy that you have customized for your strengths and weaknesses.
Not having peers and mentors that day trade
Day trading can be a lonely business. It is long hours in front of the computer with little interaction with people. Some day traders view other day traders as competition and they avoid contact. This will lead to feelings of isolation and sometimes even depression. Stay active with the day trading community with social media and you will stay better informed and better contacted. You will also have the ability to help new day traders and meet and interact with mentors that can help you grow your portfolio and your bottom line. One of our personal favorites is seeking out Warrior Trading on Twitter. They share a lot of great information and it is a great way to meet and become “introduced” to others in the industry.
Being too scared to start
After you have done your homework, developed your day trading strategy, and analyzed your risk allocation you have to pull that trigger on that first trade. Some potential day traders get so bogged down in research and preparation, that fear paralyzes them and they never make that first trade, or they put if off for so long that they trade “scared.” This is why knowing your risk tolerance is so important, but you should not and cannot trade scared. Once you are prepared, make that first trade. Yes, you will occasionally make a wrong call, that is okay. Just learn from your mistakes and keep moving forward.
If you avoid these three common pitfalls you will be well on your way to becoming a successful and lucrative day trader. We hope this was helpful in getting you started with day trading. We want to help you get started successfully day trading so with that in mine please let us know what topics and questions you would like us to cover in the comment section below.