Day Trade: Learn From Experts
Learn Day Trade – Bear and Bull Traders
Just before sitting down to get to work on today’s blog post, I was curious and so I did an online search of the precise term “day trade”, in quotation marks. I would have bet real money with someone that there would be millions of hits. I was mistaken. There was only 615,000.
As I skimmed through the results of the first page of hits, some of the key words and phrases that jumped out at me related to “day trade” were: strategy, speculation, staying focused, naïve investor, devastating loss, playing with fire, gambler, disciplined.
My experiences have taught me that to day trade successfully, and thus profitably, you must take a very strategic and disciplined approach to each and every trade. You must plan ahead, before the markets open, and decide which stocks you will monitor and possibly day trade in that day if, and only if, the right scenario unfolds. You want to enter each trade with as little risk as possible. And with no emotion.
When I speak or write about how to day trade, I often use the term guerrilla warfare to describe the approach to take when you day trade. It’s an irregular approach to warfare in which a small group of combatants, such as paramilitary personnel or armed civilians, use hit-and-run tactics (ambushes, sabotage, raids, petty warfare) to maneuver around a larger and less-mobile traditional military force. European resistance movements, for example, engaged in guerrilla warfare while fighting against the Nazi occupiers during World War Two.
To translate this into how to day trade, you should consider yourself in hiding, waiting for an opportunity to move in and out of the financial battlefield in a short period of time to generate quick profits while keeping your risk to a minimum. When you day trade, your goal is not to defeat or outsmart the Wall Street investment banks. You are simply and patiently waiting for the opportunity to make a smart and calculated move.
Be very selective in when you make a trade and monitor the price action very, very closely. Find the best possible stocks to day trade each day. Find the moments when Wall Street’s computer formulas and algorithms cannot take your money. Find where to best enter the trade. Make your move. Make your exit. Take your profit.
To day trade successfully, you must be prepared to trade in time periods as short as ten to thirty seconds. Yes, it can be very stressful. You need to control your stress levels and emotions. You usually should only make two or three trades each day. Don’t over trade when you day trade.
I would have bet real money, and lost real money, if someone had asked how many times the term “day trade” comes up in an online search. When you day trade, don’t gamble with your real money. Be a guerrilla soldier, be strategic, be calculating, and you’ll be much more apt to be successful.