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12 Mistakes that will make you awful at day trading

12 Mistakes that will make you awful at day trading

Hey, we’ll be the first to admit it. It’s pretty easy to screw up day trading if you have no clue what you’re doing. However, there is also a lot of good that can come from becoming a good trader. So, how do you do it? First off, avoid making any of these mistakes and you will have an edge on most of the beginners just trying to figure out the stock market.

1 – Jump In Without A Price Target

Here’s a quick way to tip off others that you are clueless about day trading. Buy a long position without any goals in place. Don’t bother considering what level of profit you would like to see or the stop-loss level you can live with if the trade goes south on you. By not having price targets set to work within, you get to prove that you are not very good at money management.

2 – Impatience Is Golden

You may spot them. You know, those traders that sit idly by their computers watching and observing things. They pay attention to details and plot their next move. That’s pretty dull and far too organized for you. Ignore those guys and just go nuts. Trade all day, every day and you’ll see a lot of action. You’ll also show those other guys that you really are off the chart.

3 – Order Often

Again, there’s day traders who sit and think and strategize all freakin’ day or week. They say it’s because they are carefully planning their trades. That’s dull and boring. The only way you’ll get ahead is to click the order button frequently. The more often you do, the more trades you can get in action. It’s a move that will get you noticed and people will start to stare at you.

4 – Trade With More Than You Can Afford

Sure, the smart guys will avoid this move. They say it’s foolhardy. They claim it’s a ginormous stock market error that can set you back so far you’ll never recover. We say phooey! There’s nothing worth doing if you can’t handle a bit of serious risk every now and then. Well, unless you jump out of a plane and forget your parachute. Not using a trade budget is a lot like that.

5 – Stick With Only Stocks

Think about this for a minute. Why do you think it’s called a stock market? Why do you think it attracts day trading? That’s because day traders are interested in stocks. Some may say that you should mix it up a titch. You know, throw in Forex, options and some futures. That’s for pansies. When you day trade stocks, just do that. Then maybe someone will pick up on your moves.

6 – Always Second Guess Yourself

Do we even need to explain this? Whenever you suffer a loss in the market, it was probably related to the fact that you made a bone-headed decision. Day trading is not for losers. You need to win and win all the time in order to succeed. Ignore those traders who say otherwise. Unless they happen to drive a Beemer. Flipping back and forth on trades is also fun for everyone!

7 – Supply And Demand Is Just A Gimmick

There are a lot of traders who follow supply and demand data. Yuck! As if that helped anyone in business. As a day trader you are sort of a solo pilot. You don’t need no stinkin’ charts filled with data that only rocket scientists can decipher. Nope. You can make your own decisions and toss caution to the wind because that’s how the West was won…without gimmicks.

8 – Risk/Reward Ratios Are Too Restrictive

You’ll find a lot of beginners plotting something called a risk/reward ratio. A common figure used is 3:1. So-called experts call it a lose small and win big strategy. Well, we know where that’s going so to be any good at day trading you must avoid such nonsense. Go big or go home should be your motto and it’ll get others thinking that way as well when you start winning.

9 – Discipline Is For Criminals

The common thought about day trading is that in order to be successful at it, in addition to all the other bunk you’ve read about, is to be disciplined. In our mind the only people who should be disciplined are those who did something wrong. By being a free agent you have the ability to do whatever you please when day trading. It’s a lot more fun without a lot of guidelines.

10 – Blow As Much As You Can With A Big Trade

We find it amusing that those so-called experts like to push the concept of budgeting how much capital to risk in a single trade. They probably also slow down for yellow traffic lights. Back to our go big or go home philosophy, clearly there is some kind of discrepancy here. In order to get into the big leagues you can’t do it by taking just baby steps. Go all in or it’s not worth it.

11 – Never Trust What You See On The Internet

One of the biggest mistakes day traders make is to refer to Mr. Google for advice. With all the fake news out there you can’t be sure anymore if that news report about an oil crisis in the Middle East is even true. That’s why it’s always better to just spin a wheel, flip a coin or see your Tarot card reader before firing up your day trading computer for the day.

12 – Mistakes Teach You Nothing

Forget what they said in school about mistakes teaching valuable lessons. All mistakes are is reminders of bad decisions. The best way to avoid that is to never refer to a mistake with that term. On the offhand chance you have a trade loss call it a ‘financial malfunction’ which indicates it can be fixed. Blame shifting is king if you are a day trader.

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Investing in penny stocks

Investing in awesome penny stocks can bring substantial rewards, and the risk is low enough for anyone to become a stock trader. These tips will help investors become more successful in trading penny stocks.

Look for Companies that can Make a Profit

If the company has made a profit or is making a profit now, that’s a good sign. Startup companies often operate at a loss but don’t assume that will change. Look at the causes of the losses. Why is this company losing money? Will they be able to recover on their own? If they have to seek additional financing, that will dilute your shares, and a joint partnership may give control or financial advantage to the other company. Avoid situations where the company does not look poised to become profitable. These are definitely not awesome penny stocks.

Be Realistic

Understand that these are penny stocks, and there’s a reason for that. Don’t expect to discover the next Coca-Cola or Wal-Mart. Know what penny stocks are and what is reasonable to expect. Awesome penny stocks can be a good investment, but it’s important to keep their nature in mind.

Look at Liquidity

You want to see a consistently high volume in trading. The average may not be very enlightening because a large volume Monday but no trading for six days could still yield a deceptively large weekly average trading volume. Also, make sure that the trades are not all from one insider. You don’t want to end up dead money that you’ll have to dump at the bid for a lower selling price. You want awesome penny stocks with great volume and returns.

Have a Plan and Follow that Plan

Even awesome penny stocks are not stable. They move quickly in either direction and if you’re not careful with your investments, you can quickly end up running out of money when a stock drops quickly. Remember, if a stock costs $0.10, a decline of only $0.02 is a 20% loss. Move on when you get stopped out. Don’t be tempted.

Know Your Source

Many penny stock investors get their stock information from email newsletters. This is not necessarily a bad thing. There are great newsletters out there. However, others are nothing but pump and dump schemes. Before trusting any source, subscribe to the newsletter and track the investments it recommends. After a short time, you’ll be able to tell whether the newsletter is giving good information about awesome penny stocks with a legitimate opportunity to make money.

Penny stocks are a good investment when done right, and investing in awesome penny stocks is enjoyable. The volatility of the stocks adds to the fun of trading. An investor armed with these tips for doing well in penny stocks will be much more successful. As a byproduct, penny stock trading will be more fun, because success is always more enjoyable than the alternative.

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