Thinking of online day trading? Don’t start before you read this post.
New investors who are eager to start day trading will most likely fail within the first few months, losing their entire savings by trading the wrong stocks, options and futures.
Here’s a startling fact: majority of people fail at trading when they first start out. Newcomers don’t spend the necessary time practicing trades on paper before they dive into online day trading world. These new investors lack the confidence and expertise to successfully pursue trading either as a part-time or full-time job.
So, what causes the newbies to fail? Basically, we can summarize it down to 3 reasons.
Not enough experience
This is a no-brainer, but quite possibly the most important one. If you decide to jump into the world of day trading and have not practiced before, then you are wasting your time. I would say trading on paper for at least a year with 10,000$ of play money is the way to go. When you are comfortable with your trades and are in the positives, then start trading with real money.
Trading with emotions
If you trade with your emotions, you are going to lose. The experts who dominate the online day trading world are emotionless and have a cold approach to trading. If you trade with anger and depression, you can kiss your money goodbye. You need to make decisions with logic and fact, and not with your heart or gut feelings.
Too much greed
When you start seeing the money rolling in, you’re going to want more and more. Greed is a good way to encourage people to make money, but it can also be one’s downfall. Charles Langford, who is a well-known day trader, always said to keep the greed in control. You should stick to one or two trades a day and call it quits. You need to be patient and let the money drip in slowly, or else you will start treating day trading as another form of gambling, which is not a good thing.