Day Trading Psychology

Day Trading Psychology defines a day trader. Day trading is a method of stock trading, where a trade is opened and closed on the same day. At the end of the day stock position should be nil.

Day trading is not for everyone.

Day Trading Psychology determines your success. Though day trading appears simple, easy, and lucrative, it is stubborn, adament and it demands. More casualties of stock trading are seen in day trading than in any other types of trading.

This is because, apart from learning technical analysis, chart patterns, Japanese Candlestick Patterns, different types of charts and orders, there is something else that is needed. It is not a good PC, high speed internet, real time data, day trading software, brokers, etc;. It is not even the books, courses and strategies.

It is YOU

Are you the person having the qualities of a day trader?
Do you have the day trading mind?
Check out.

A day trader should be like a Lion. How does a lion fetches its food?

A lion, (please picturize mentally as I continue) will wait, patiently, for its prey to be at an attack distance. It positions itself so that its prey can be cornered. When the right time comes, it attacks with a high speed. Strikes with a precision. It catches the prey at the right place and focuses on its kill until it is over.

    Now question your self.

  • Are you patient enough to wait for the right trade set up.

  • More than 50% of time market runs in side trend. It takes longer time to fuel a trend momentum. But the trend lasts for a shorter duration. Can you wait patiently until a trade set up is complete? That is why I say trading is boring.

  • Can you make the right decision in one or two seconds.

  • Market is dynamic. Unlike the study of day bars, where the market is closed and there is plenty of time to make decision, until the next day, study of minutes bars poses a challenge. The market is open and changing. There is hardly any time to make decision. In such a situation, can you make trading decision in seconds?

  • Are you ready to wait until a valid buy / sell signal is triggered.

  • Premature entry to a trade will make your trading life miserable. If the valid signal has not yet triggered, there are more chances that the trade may go opposite, to the expected direction.

  • Can you place and execute the required orders, before the prices moves away from the price of entry.

  • Once a trade entry is triggered, the prices reaches the target in a very short time comparatively. I have seen the target achieved in less than a minute. Such a dynamicity requires a fast decision and a fast action.

  • Can you focus on your trade without any sort of disturbances, until the trade is completed.

  • After the trade is triggered, anything can happen. It may be a false break out and the price might reverse immediately after the entry. The trade might achieve its target and reverses, so the once profitable trade will turn into a loss trade. Or it might linger in a side movement, wasting the precious time. So once you enter your trading room, no phone calls, no chit chating, no TV, no story books. (And no quarreling with your spouse, or no romance also.) You cannot combine day trading with other businesses. So can you spare your undivided, undisturbed, attentive trading mind, until the trade is completed.

  • Are you young and energetic?

  • Maximum percentage of beginners who succeed in day trading, are below the age of 35. Younger age tends to be dashing, takes higher risk and makes decision faster. Older age tends to be more slow and avoids risk. Same is true for learning any other faculties, like swimming, car driving, skiing, para jumping, etc;. But once you have trained your day trading mind, continuing at older age may not be a problem.
Day Trading Psychology rules.

With all these think, whether you possess the day trading basics with in you. Is it for you?

These day trading ideas holds good, at all geographic areas. I am writing all this not to discourage you. But to inform you what it takes. After all any body with average intelligence can be trained, in any field. It is only a matter of time.

If it does not suit you, the other alternative may be swing trading.

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