HOW TO AVOID DAY TRADING MISTAKES ? -
CONTINUED
STEP 9
Manage your Mood, before your Money. If you are ill,
cranky, depressed, or sad, those are days when you may want to take a break
from trading. Otherwise, you could make costly mistakes. You must learn to
manage these limiting/distracting moods before you manage your trades/money.
Furthermore, trading while you are stressed out is stupid. Same for any sport.
Winning in this business of trading stocks is like winning in any other
sport/business - you need to relate well. Relate with yourself, relate well
with your coach, if you have a trading coach, and relating with what you see on
your monitors, peacefully and powerfully - with 80% of what I call the noise designed
out or missing. To relate well, you want to be calm and energized. Same for day
trading. To win, to perform at you optimal level of competence is eventually
going to be all about trading on instinct - not much time for emotions, not
much time, frankly, for all the thinking you've become accustomed to that
drains both your energy and your mood of calm. What makes day trading so unique
and exciting is that you trade the action, in the now. Like tennis, like racing
a car at Indy, or any CEO in business - you gain the competence to consistently
win with your coach, to have the intuitive ability to act effectively,
profitably - to win, over and over, and over again.
STEP 10
Keep detailed records - a trading log with self
assessments of your trading performance. Go back and read them for insights and
share the important aspects with your coach. As in any business, keeping
detailed records of all your transactions is vital for many reasons including
profit and loss analysis, taxes and much more. Performance data is very useful
for your learning, but not so much while trading, as you know, as that reading
can be distracting in the present moment of trading. While trading - observing
a valid setup, confirming what you need to be present as conditions or rules
before you enter a trade, managing the trade for the best winning results or
the smallest losing outcome - you rely on your confidence, your level of
competence, and whatever performance excellence you may have accumulated with
your coach - without thinking much, without your logs, without the news and all
the other noise - you just trade, zen-like.
STEP 11
Save your profits. Whenever possible, leave your profits
in your account and do not spend them. Run your day trading like a business. Do
not reinvest all your profit back into dangerous, big money losing trades.
STEP 12
Cut your losses. Do not let a loser run in hopes of it
rising again, unless there is sound evidence right before your eyes that it
will. When you sense your trade is not working or no longer working simply get
out with a small loss, break even, or a nice fat win.
*****
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