1) Not having a trading plan before engaging in a trade: A day trader without a particular plan of action before entering any futures trade is like a delivery driver going about his/her duties in a strange state without a map! A day trader with no plan does not know, among other things when or where to enter and exit his or her position. Neither does he/she know how much money could be made or lost. Traders with no pre-determined trading plan are basically gambling which is usually a recipe for disaster.
2) Insufficient trading capital and/or improper money management or risk management: It does not take a fortune to trade the futures market successfully. Day traders with as little as $3000 in their trading accounts can and often trade futures with a high degree of success. As well, traders with $100000 or more in their accounts can and do lose it all in a blink of an eye! Part of day trading success boils down to judicious money management and not engaging in the high risk low reward "home run" type trades that encumbers trading higher contracts with higher capital all at once.
3) Two of the best virtues I've learned as a day trader are patience and discipline. A lack of these two attributes can cause a trader to make uncharacteristic mistakes and lose money. As a day trader, you have to be patient and disciplined enough not to trade when the conditions are not conducive. Don't trade just for the sake of trading. Be patient enough to wait for those good set ups before you pull the trigger. It's better to miss a "golden" trade opportunity than to take a bad trade.
4) Having a tunnel vision about the market and not doing any intermarket analysis. One can look at a daily bar chart for any financial market and get a short term perspective on that market's trend. However, without analyzing the related markets to the market of your interest will more often cause losing trades. A look at a weekly or even a monthly chart of the market of interest as well as its related markets will reveal an absolutely varied perspective.
5) Another reason for failure as a day trader is "Over Trading". Trading excessively or too many markets at one time is a huge mistake. Often when a trader is racking up losers the tendency to keep trading to recoup losses are great. But you have to know when enough is enough and remember that though, the market will be there tomorrow you may not be able to trade because you blew your account up to a zero or negative balance! It takes keen focus and concentration to be a successful day trader. Resist the temptation to over trade!
6) Not taking full responsibility for your own action. When I first started trading, each time I lost I always blamed somebody or the system. There were too many excuses made to cover my inadequacies. To be a successful day trader you have to fully accept every responsibility for your actions or you will find any excuse to fail or not to make money. When you have a losing streak or trade don't blame your broker or computer or trading software. You're solely responsible for your success or failure as a day trader. You make every decision to trade and if you feel you're not in complete control of your own trading then it's time to make the necessary adjustment to put you in charge of your trading destiny.
7) Holding on to losing trades, hoping and praying that the market will turn around in your favor. When it comes to day trading, throw away religion and hope. When the market ticks against you it's just common sense to bail out of your position. Majority of successful day traders will not sit on a losing trade at all. The successful day trader never puts on a trade without either a mental or hard stop. You should always pre-determine how much you're willing to risk for every trade and set a tight stop for your risk. Once your stop is reached don't be tempted to cancel it in order to hold onto that losing position. Traders who sit on a losing trade hoping and praying that the market will turn around in their favor usually lose all their trading capital!
8) Counter Trend Trading or attempting to pick the top or bottom. Nobody really knows when a market has hit the top or bottom! You've probably heard the terms "Buy Low and Sell High" or "sell high and buy low" if you were going short. Unfortunately that's not a proven theory when it comes to day trading. When you think the market cannot go any lower, lo and behold it breaks all fibonacci supports and continues to sink! The opposite is also true for a market that you think has hit the top--breaks solid resistance levels. The most successful trading strategy is to trade with the trend and not to fight the market. Having said that, chasing the market is equally dangerous. Just wait patiently for a pull back and go with the trend. I have occasionally made profitable winning trades without any charts or trading software just by following the current trend of the market! I don't recommend doing it as I only did it to prove a theory!
9) Not using a protective stop for your trade. If you're not using a protective stop for every trade you take then you're risking every penny you got! In that instance you might as well take your money and go to 'Vegas where you will at least get some free drinks! Using a protective buy stop or sell stop upon executing a trade will give you a good idea of the risk involved in that trade. You also pre-determine how much you're willing to lose should the trade not go in your direction. I don't like using the word lose when it comes to trading, I prefer to call it expense! In any case protective stops is a good money-management concept that will help you minimize your risk although it's not perfect.
10) High Expectations. If you're like most people, you probably got involved with day trading as a result of a hyped up advertising or day trading seminar. I hate to be the bearer of bad news but beginner day traders that expect to quit their "day job" and make millions day trading in a year or so are often disappointed and despaired. Day trading is like any other profession, you don't become a success story in just a year or so of practice. Just as you don't expect to become an accomplished surgeon, lawyer or business owner over night, neither should you have that expectation as day trader. Once you have mastered day trading it's like having a legal "money making" machine at your disposal.