5 Fatal Mistakes that Day Traders Make

I have been teaching traders now for roughly 8 out of the near 10 years of my trading career. I have seen people instantly start trading live in a matter of weeks and others that have seen their savings disappear in a matter of years.

In the end, there are only a handful of reasons why you aren’t a professional day trader yet.

Day trading eminis isn’t the easiest thing in the world because if it was everyone would be doing it. I’ve already vented and talked about my beef with the day trading companies in this industry that wreak havoc on the education industry.

Don’t Purchase Anything With “Software” In The Title
Do you personally know any day trader’s actually making money with “software”? The only people that making money with software are the companies and hedge funds that pour billions of dollars making them. The problem with software is that it’s built on a set of rules and when the market changes the software results go with it.

How many traders using software have been able eke out at least 2 points during the record low volume during this past month (August 2012)?

The problem with any software is that it cannot adapt. In my ten years in the industry I personally know one day trader that has developed his own software. It just so happens that he has to constantly watch the software and change the variables. He spends more time adjusting settings than he would actually spend day trading.

Buy any educational program that you think is worth it even if it costs you $20,000. But please, please, NEVER buy anything with software in the title.

Try to Trade Like Someone Else
Do you try to drive like someone else? Do you try to kiss like someone else? Let’s make it more simple, do you try to eat like someone else?

No You Don’t

The reason why you don’t is because you don’t feel comfortable when you don’t act like yourself. She may not like the way you kiss anyway.

When it comes to day trading you have to do what you feel comfortable with. One of the things that I do with the Congressive Trading System as well as the MIND Trading Strategy is allow anyone to add on or take away from the strategy.

There is no wrong way to trade as long as you are making right decisions

Once you understand how the market works you can combine 1 million different ideas or even indicators that work. At the end of the day, if you don’t feel comfortable with what you are doing then you aren’t going to be successful day trading.

Trade Indicators Instead of The Market
This is one of the biggest fallacies when it comes to day trading. The most important thing when it comes to day trading is learning how the market works and understanding it’s movement. There have been studies to prove that only 10% day traders actually make money. 7% of those day traders are breaking even and 3% are the traders that are actually making money.

Anyone can take indicators away from you, no one can take away a true understanding of the market

This is the sole reason why I try to teach all my traders involved in the training program how to understand how the market works. All indicators that are available today are lagging, in other words, indicators react to price.

We trade the market not indicators

So why would you put together fancy colors in order to hide what’s really important? Take off the rainbow from your charts and start paying attention to wants important, the market. There are no magic indicators, fancy bright lines, or arrows to tell you when to get in and out, that is going to replace a true understanding of the market.

Take Shortcuts
If you are going to learn how to day trade do it properly. You cannot expect to master a skill if you skip through a curriculum and not fully educate yourself. There is a reason that when we go to school they have us complete endless amounts of busy work.

Math exercises solving for X when we could be spending our time more productively elsewhere

No matter who you choose to educate you, make sure that you take it serious and not take any shortcuts. While most education companies out there are horrible and just want your money, there are people that want to help.

Have no fear, the monthly challenge is coming soon

Don’t Attack The Market Without A Plan
Day trading isn’t that difficult; buy a decent laptop, pay a guru for some training, and voilah! Your making money day trading.

In order to make money in the stock market we have to think analytically. It is harder to think analytically when money is involved. We all work hard for our money and most of us had to work sweat and tears for it, to risk it and lose it the stock market hits home for everyone.

When you anticipate what the market is going to do you are prepared for anything the market can throw at you. The ability no, the feeling and ease that arises from knowing that you are prepared for any situation puts our emotions at bay.

If you are ready you know how to react, if you know how to react you know you will lose only a minimal amount of money. If you are know you are only going to lose a minimal amount of money you will only lose a fraction of what you could when day trading.

Be prepared for anything, don’t react to the market.

The Misleading Notion That You Need To Make A Billion Dollars A Day
You don’t have to trade like John Doe that makes a billion dollars every in order to have your freedom and be a day trader. I am 28 years old and I have been semi retired since age 25.

I am not millionaire nor am I dying to be

I live a lifestyle that very few people get to live, including millionaires, because I know the power of consistency. You only have to make a little bit of money every day (roughly 2 points with the ES) and over time that will accumulate.

Soon you will find yourself only trading 5-10 days a month while you explore places like the Brazilians Maldives.