Opposite the successful day traders who trade with the necessary moderation, there are those who trade excessively without realizing that they are signing up for sure losses.
Here are the two types of over traders:
Type I: Technical Over trader
Novices in trading justify their actions by the technicalities of this field. Many of them find some technicalities working to their advantage. They then make pre-determined positions and look for some indicators to confirm their choices. After a few times of using the techniques they've developed, they create rules and stick to them. If the system works for them more often than not, they begin to believe that they have found a lucrative secret to trading and have beaten the odds. They then begin to take advantage of the system to increase their profitability. This is not really a bad practice but it lends to overtrading which could backfire on them.
Type II: Impulsive Over trader
People who make use of non-statistical or mathematical data often rely on other people's opinions, on the news, on their personal observations and hunches and advice by so-called experts or gurus. The problem with these is that they cannot compensate for quantifiable data and that the discretional over trader finds it hard to stay put because of them. He cannot stand inactivity thus he has to satisfy his compulsion to trade. The lack of assessment of sufficient indicators and enough technical knowledge is often the downfall of a trader.
Many have the impulse to overtrade and this impulse should be avoided. The key here is the practice discipline.
Being able to restrain oneself is a common characteristic of a successful trader. He could control himself and he has the capacity to become immune to common pitfalls that affect average trades. For example, he could be neutral when entering or exiting a trade, he knows that emotions have no place in this battlefield. He does not become too excited or too panicky when he achieves something great or when he begins to slide down. His emotional state is the same on days when he is making thousands of dollars and on days when he losing twice as much.
Discipline also includes the constant practice of patience during training. He not only trains with day trading courses or seminars but he also treat each day of trading as training day. He strives to continually enhance his capacities and skills as a trader without stopping when he thinks he's reached his peak.
Miodrag Trajkovic is an expert on information related to Day Trading, Day Trading Mistakes, Day Trading Strategies, Online Day Trading and Day Trading Systems. Article Source: http://EzineArticles.com/?expert=Miodrag_Trajkovic |