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Day trading can be an exciting way to make money. But it’s more challenging than most beginners think. Here are some trading tips that can help both the new trader and the advanced trader achieve your goals faster.
First: Be careful not to act too much. Most of the time the market is a random walk – which means it moves for no rhyme or reason. Behind these unpredictable moves are amateur traders taking small positions in the market.
These amateurs have no control over the long-term movement of the market. The professionals, with their large volume and willingness to hold positions longer, are the ones who create sustained movements in the market that can generate significant profits.
Many people are drawn to day trading because of the excitement of the business and the potential for big, quick wins. This attitude makes the trader fail. Day trading doesn’t have the hectic energy of a video game. Most successful day traders sit on the sidelines for a long time, simply waiting for a high probability setup to occur. The professionals trade much less than the amateurs think.
Second: The trend is your friend … sometimes.
The truth is that the trend is fair weather buddy!
It’s your friend from the start. But the trends are running out of breath.
Hence, when you can put statistics on your side, there are 2 opportunities to act:
When a new trend is just beginning.
When a trend has taken its course.
If you only trade at these 2 times, you can put the statistics of the “edge” of the bell curve on your side. When you are in the middle of a trend, you are firmly in the middle of the bell curve where anything can happen.
third: Join Free Trading Rooms for Day Trading Tips, But Do Just The Opposite Of What You Hear!
I have participated in many chat rooms over the years and have benefited tremendously from them. But the benefit did not come from listening to Teacher. It came from watching the participants’ comments communicating what they were doing in the market at any given time.
Most of the time, they were completely wrong in their approach.
They reveal the spirit of unprofitable retailers. It is almost scary how the amateurs think similarly when trading in the markets. If you listen to them in the trading rooms long enough, you will notice the patterns of the things they do all the time. Do the opposite and win.
For example, one of the most common problems faced by amateur traders is resisting the urge to fight the trend. You will often hear comments like, “The market cannot go higher.” “This market just has to turn around now.” “The market is now definitely overwhelmed.”
It is absolutely amazing to see how amateurs habitually go against the trend to find ups and downs. You are constantly looking for a turnaround in the market. As always, you can profit tremendously by taking the other side of your trades.
Day trading can be extremely rewarding, but to be successful you need to stand out from the crowd and avoid the herd instinct that drives so many. These 3-day trading tips can help you belong to the minority that is successful.
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Source by Dr. Barry Burns