Learning to Day Trade: Make Sure You Check Yourself

The title of this post is somewhat of a charge, or even an admonition. I encourage everyone who is interested in the financial markets to any degree to learn to day trade. I believe that in order to become a well-rounded trader, you cannot pigeonhole yourself into one particular trading style. Yes, after a while you may find your particular flow and stay in that flow because it’s producing results for you, but in my mind you should never be afraid to experiment, within reason. Now that doesn’t mean that you go and blow your money on poorly planned trades; it means that you approach each type of trading discipline with enough information to make solid trading decisions, and then move forward with a well-thought-out and well planned trade, implementing a trading style that has a specific anticipated outcome. One of those trading styles that has definite merit is day trading. Yes, it has received bad press due to some people that truly were not emotionally or psychologically ready to day trade but yet tried to put their entire trading account up for one trade and basically “bet the farm” on a lucky chance and then subsequently lost everything and killed themselves; this obviously has shed a bad light on day trading, to the point where the “official” trading advisors have recommended that the average investor should stay far away from day trading. I will have to say that I partially agree with that, due to my understanding of the nature of human beings. If you are the kind of person that has any type of gambling tendencies, or depends heavily upon luck (i.e., you buy lottery tickets every week and actually believe that you have a fighting chance), it would probably be much better for you to never even touch day trading. Any type of personality that makes money their “god” also should never get involved in day trading. Any person that doesn’t know how to handle financial losses, or is not very skilled in money management, definitely does not need to try day trading. I will also say that the person who uses their mortgage money or their car payment money to trade with needs to stay the heck out of the markets. You never, ever, ever risk more money than you could comfortably lose. It’s never a cool thing and it should not be an “exciting” thing for you to trade next month’s rent money just for the “thrill of it”. Believe it or not, some people trade for no other reason than they crave some excitement in their lives, and they don’t have any outlet other than trading. In their minds, the possibility of making or losing money on a high-stakes trade is almost like a joyride. Then, when they rise high and fall fast, they’re left to pick up the pieces, but deep down in their hearts, they found some sort of emotional fulfillment in the mental roller coaster that just took place. All of this stuff can really hinder the pure trading process, and it can really cripple people financially. As strange as it might sound, you actually have to have the right motive for trading in order to trade successfully. In other words, you have to actually want to make money. Your sole objective needs to be to earn a good return on your capital invested, leaving emotions, thrills and chills completely out of the equation. This one point is so vital to understand, and I’m telling you, so many traders skip right over it without ever considering whether or not it applies to them. The truth of the matter is, you can forget about learning swing trading, day trading signals, or any type of stock trading systems if you don’t settle this vital issue first. Why do you want to trade? No really, why do you want to trade? I feel like many of us have to have a “Good Will Hunting” moment where we face up to ourselves before we can really ever become effective day traders. Although I highly encourage everyone who is interested in the financial markets to learn to day trade, that’s the one signpost along the way that I believe everyone needs to take heed to. Without that question being settled first, any attempts to day trade will only produce a limited degree of success. Well…I’ve given you enough to think about for this post…I’m out, until next time.