One of the things that came to mind when broached about this topic was the Dr. Dealgood quote from Mad Max Beyond the Thunderdome: “I know you won’t break the rules, because there aren’t any.”
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So, what could I actually tell you about Day Trader No-No’s?
Your trading style is going to mature and pivot the more you do it. New tools are going to become available, more charts to study. There is nothing static about day trading and rules, well, depending on what aspect of trading you’re talking about, don’t age all that well. Then let’s stick to some of the things that we do as traders that are timeless.
No Emotional Trading
If you can remember that the markets don’t care if you’re having a good or bad day, then it might help you to remember that you too need to be cold as ice in your trading decisions.
A lot of money has been lost because of emotional trading. If it doesn’t rank up there with stress shopping or emotional eating, it should be. Emotional trading is dangerous to your portfolio.
Are you in the midst of a break-up, a change in life, a stressful situation, or even a silly fight? If so, then keep out of the trading arena until you get cool again.
When we’re hyped up, adrenaline kicks in and we take bigger risks. Don’t do it.
No Distractions
If you’re day trading then you need to stay focused on the task at hand otherwise you might lose a profitable opportunity.
Turn off your phone, don’t check your email, curb messaging and social media interaction until you’ve reaching your day trading daily goal – and for goodness sake, close the tab to your solitaire game.
If you’re a smart day trader, you’ve got “office hours” so keep your attention on the trades and leave the distractions for another time.
No Gambling
Everything’s kind of a gamble, isn’t it? I mean, you can gamble with your life just by getting in the car but I digress, when you’re day trading you should not be gambling with your portfolio.
Certainly there is risk involved when you’re dabbling in a volatile cryptocurrency market but the fact remains that if you are doing your due diligence, factoring your risk-to-reward ratio, studied the charts and watched the trends, then you are stepping into the forum as prepared as you can be.
Yes, the market is always going to be a bit of a gamble, but smart day trading is all about consistency and preparedness. No gambling means no knee-jerk reactions and spur of the moment trades.
In other words, you don’t want to throw spaghetti at the wall and hope it sticks, because if you keep doing that you might as well throw your money down the toilet.
Let me also point out that even professional, seasoned traders get tempted especially when they hear news that sounds too good to be true and too hard to resist. Proceed with caution! Chances are it’s a marketer who plays on your sense of FOMO.
No Burn Out
You’re human and it’s okay to take a break from trading. In fact, it’s recommended to take some time off once in a while to rest your mind, body and spirit. There’s more to life than trading.
There’s a misnomer that taking a break is bad for trading, but what good is burning yourself out going to do?
Burnout causes us to become lazy, irritable, or worse yet, indifferent. If you get to the point where you just don’t care what’s going on in your portfolio, it’s really time to take a break before you lose any profit from your hard-earned gains, or quit trading completely.
The bottom line in trading is to make as much money as you can over a determined period of time; to work at profits consistently, and make smart decisions based on what you’re observing in the daily trade market. To be the best trader that you can possibly be, consider staying away from the No-No’s. It is not easy work, but you’ve got this!
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