posted
Specially the last one... I see so many treads in which people keep throwing money into a bad play, just to make the loss worst
Day Trading Rules
KNOW YOUR MARKET. The best day traders specialize on only a small number of indices, or stocks, and get to know them intimately.
PREPARE FOR THE DAY. You need to have done your homework, and decided where you will be looking to get in and out of the market
STICK TO YOUR PLAN. Once you have decided to follow a certain strategy, stick to it. If the strategy is sound (and your preparation should have told you this) then over time, you will make money. If you chop and change, and try to jump horses midstream, you will, on the other hand, most likely fail, and quickly. A good strategy is objective, leaving little room for your human emotions to get in the way. In a very real sense, you are competing against yourself, because if your emotions do get control of you, or you panic, you will do something you will regret.
DON'T BE GREEDY. Do NOT try to squeeze the last tenth of a point out of each day trade. You can easily afford to be slightly late on your entry and slightly early on your exit. By never hanging on for 'top dollar', you won't suffer the pain of seeing a winning trade somehow turn into a losing trade.
TAKE A LOSS WHERE NECESSARY. Most day traders who fail do so NOT because they can't create winning trades, but because they fail to kill their losers soon enough. Knowing when to take a loss is the most important lesson any day trader ever learns. If you keep your losses small, you can come back to fight another day. The way to think about this is to cast your mind back to school - exams consist of many questions. You can get some of the questions wrong, it doesn't really matter. The end result (i.e. the overall score) is the important thing. In the same way, if you have a bad trade, so what? As long as you control the loss in a calm, professional way, keeping it within the limits you have set for your money management strategy, it is STILL a good trade! It is how your profit & loss looks at the end of the month that is the important thing.. Posts: 5120 | Registered: Jun 2004
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posted
Member: Ric I thought this was an interesting chart for those who like to hold these dead pennies on the way down. Shows what type of gains you need for what a lose.
Recovering a Loss
Loss - Gain Needed to Recover Loss
10% -- 11.1%
20% -- 25.0%
30% -- 42.9%
40% -- 66.7%
50% - 100.0%
60% - 150.0%
75% - 300.0%
90% - 1000.0%
Timing your entry and exit from the market is critical to making money and controlling losses.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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posted
Great words of wisdom to live by, I am not a day trader but I believe this applies to all facets of life e motions will get you more trouble than anything else in this life. Look what happened at Gtel this morning emotional selling. All decisions should be made by common sense, whether it be money love or whatever.
Posts: 280 | From: w.sacto.ca. u.s.a. | Registered: Feb 2004
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