When it comes to day trading, your emotions can get you in a lot of trouble. One of the main reasons so many beginners fail at day trading is because they let their emotions get the best of them. They make trading decisions based on what they feel instead of based on research and a sound strategy. Successful day traders know that emotions have no place in the day trading game. They have a strategy, and they stick to that strategy no matter what.
What you must understand is that day trading is a business. And a very risky one at that. Allowing your emotions to determine what moves you make will put you in a bad position almost every time. Holding on to a trade for an extended period of time because you think the price will go back up is a bad move. Its a move that is motivated by a fear of loss. Which is exactly what will happen if you run your day trading business in this manner.
Take the time to educate yourself on money management, fundamental analysis and technical analysis. Three very important aspects of trading successfully. Combine this knowledge with a good plan and you are well on your way to being a successful day trader. However, you still must have to self discipline to follow that plan and not get sidetracked by your emotions.
Listen, trading is an emotional roller coaster. One moment you are up and the next you are down. But you have to have enough faith in your plan to follow it no matter what. Before you start trading, determine where you will get out and stick with that no matter what. Don't let fear or greed be your motivator. Both can cause you to lose a lot of money. And sometimes the loss is so great that you will be unable to bounce back.
Invest in a software that will allow you to set and forget your trades. This way you can step away from your computer and focus on other things. Create your strategy, tell the software what you want it to do and then let it do it. I know itís hard to do, but don't sit there obsessing over every move. Go do something else. This way you can keep emotions at bay and avoid making mistakes that can cost you a lot of money.