Stock Trading for Beginners: Boring but Rewarding
Mom, I’m bored.
How many moms – and dads – reading this post cringe when they hear their little ones utter those infamous words? I’m bored. Bo. Ring. Children may pause so long between the syllables that it will sound like two words.
How can you be bored? There’s a whole world out there to explore. To learn about. To enjoy. I love the outdoors. I love being out in nature. Climbing. Hiking. I love life. But you know what? Successful day trading is boring. It’s slow. It’s monotonous. It requires patience.
Day trading is a boring profession – most of the time you are just sitting and watching your computer screens. Each morning I usually select three Stocks in Play. They’re the stocks I sense will provide me the best opportunity to make a profit on that day. I then sit at my desk and I watch each stock’s performance separately on my three monitors. When I see a potential strategy, I plan my trade. It’s a fast decision making process. Sometimes I have to plan a trade in a few minutes and at other times in just a few seconds. That part isn’t boring.
I focus considerably on quality versus quantity. There are millions of traders out there and there are no doubt millions of strategies out there as well. The strategy that works best for me involves waiting on the sidelines until I see something worth trading. Boring? Yes.
If day trading is not boring for you, then you are probably overtrading. If you require a reminder of the importance of patience in trading, here it is. There are plenty of traders out there who are making the error of overtrading. Overtrading can mean trading 20, 30, 40, or even 60 times a day.
You’ll be commissioning your broker to do each and every one of those trades, so you are going to lose both money and commissions. Many brokers charge $4.95 for each trade, so for 40 trades each day, you will end up paying $200 each day to your broker. That’s a lot. If you overtrade, your broker will become richer, and you will become, well, broker!
Remember, a successful day trader trades well, not often. Quality versus quantity. And yes, I admit, it’s boring at times.