Day trading Do’s & Don’ts

While I’ve worked in the financial world for some time now and hold my General Securities license, I know very little about the world of day trading, and curiosity has gotten the best of me. As nerdy as it may sound, I’ve decided I want to learn more about it after hearing my boyfriend talk about it and realizing I have been staring at him like a deer in the headlights with all the information virtually passing over my head. So after doing a bit of studying the subject of day trading and assimilating the information I consider to come from reliable resources, here are some tidbits I’ve picked up for anyone that has a similar burning curiosity:

If you are looking to start day trading for yourself, there are some behaviors you definitely do NOT want to emulate. For one, don’t be fooled into thinking that the more you read from a wide range of sources, the more informed your decisions will be. Subscribing to every financial publication out there will not serve you well; it will only lead to more confusion; there are such a wide range of methodologies, tactics, analysis & personal opinion on day trading that unless you are a seasoned day trader, you will only end up confused and annoyed and possibly making hasty trades based on your frustration level. It’s a bit like going to the racetrack and if you read a wide range of ‘professional analysis’ in addition to the pink sheet, and all the information has a different angle, you will probably end up just placing your bet on whatever horse looks the most lively or your preference for the color of the silks the jockey is wearing. Day trading is not something to go into uninformed, but you need to know where to get the best information.

Two major competing emotions, fear and greed

In the world of day trading: less may be more. It’s easy to get caught up in the excitement of seeing a trade come back with an unexpected high rate of return, but your success does NOT depend on the number of trades you place. In many ways, the day trading mentality could very well be likened to that of a gambler; they both live for the thrill of the game and the possibility of hitting it big. Don’t let this become and obsession; this is where poor decisions are made just for the sake of placing a trade and could have serious consequences.

Tags: day trading, day trading for beginners, day trading philosophy, day trading tips