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Day Trading for Dummies

Day Trading for Dummies
February 01
13:14 2011

The winning formula outlined here in this day trading for dummies article is a basic amalgamation of things that traders typically will need to be profitable day traders. While there may be additional things that you add to your day trading to become profitable, these few things will be the bedrock of the winning trader’s foundation.

A system and trading plan.

Any winning trader will have a trading system that they are very dedicated to, and are diligent in following. They will have tested the system over and over, and have a significant amount of faith in its expectancy. They also will have a trading plan. The trading plan is made up of the system, and other rules that the trader will follow. Some of these rules outside of the trading system could be things like never trading during the news announcement, or even never trading on Fridays.

A reasonable amount of trading capital.

One of the most dangerous things day trader can do is have an underfunded trading account. You simply must have enough capital to survive a string of bad trades. If you find that after three or four losses, you’ve lost half or more of your capital, you are simply going to have dug too deep of a hole to crawl out of.

A stable financial situation.

A day trader simply must not be completely dependent on the trading account to eat, pay rent, or any of the other necessities in life as it will put way too much pressure on the trader. Traders who have too much pressure on them, and make poor decisions and therefore end up losing a lot of their money.

Continued education.

The day trader needs to continue his or her education, as becoming a great day trader is a lifelong pursuit. Day trading is not something you master overnight, nor is it something that could be completely mastered at all. It is a lifetime of study, work, and education that is commonly found among the great day traders of the world. This is true in the trading community, much like it is in the various professions that you find out in the “real world”.

The right tools.

The correct tools for a day trader are absolutely essential. The tools can be charting packages, the right brokerage house, the proper reference materials, and even the best information and news available.

The right tools can also include your computer, office, journal, and of course – yourself!

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