You Have Had a Good Day Trading...Now What?
While it remains to be said, and we talked about this before, greed at times is NOT your friend. If you are trading lots of money and looking for long term positions you have to be prepared to be wrong most of the time. However when you are right and this is where I agree with Stan Druckenmiller you must get greedy. It is the only way to produce superior returns.
However most of us are not Stan D. and quite frankly never will be. That is alright. The first mistake most traders make is they think that they can do what he does or other guru's do. This is a huge mistake. You likely can't ever do this so quit fooling yourself. If you could you would likely already be in his place. Your not and so that tells you something. It's like saying that you will be a Michael Jordan just because you play a decent pick up game. Doesn't make much sense does it when you look at it like that.
However unlike most want to be basketball players you can beat the pros from time to time because your account is smaller and you are much more nimble than they are.
So you have had a good day. You are happy. What should you do?
Most of the time here I give you trade strategies, but not really a plan. There is a difference trust me.
Entering the market in the first place is about ROI not wins and losses. You must have daily and weekly goals that you set for yourself. A set of rules to follow and the discipline to stick with them even if it is not working the way you want. Not easy is it?
I have daily goals that I set. I trade mentally with several systems that I know the rules of like the back of my hand. Most days I do alright. Some days I don't. There are 240 trading days in a year. Most weeks have 3 good trading days. Every 50 days or so the market will trend. Each day has a time that is good to trade and not so good depending on the market.
You need to know all these things in advance. Do you you know where you may wish to execute and why? Do you define these ahead of time or do you just "go for it"?
How much money do you want to LOSE each day. This is what you must know ahead of time. That will keep you humble. You never look at wins first. Never!
When you hit your numbers that you need to produce your weekly or monthly ROI do you keep trading? Some will say you should. I say different.
In my opinion you should stop trading once you hit your goals and fulfill your daily plan. It is far too competitive to keep executing. You will in all likelihood give it all back and then some.
So Stop when you hit your daily goals. Don't get too greedy. Close your station and go do something else you love to do. Day trading is a battle and it wears on you as the year progresses. If you overtrade and overanalyze you will inevitably become mentally fatigued and this is where you will lose. So don't do it. Cheers!
However most of us are not Stan D. and quite frankly never will be. That is alright. The first mistake most traders make is they think that they can do what he does or other guru's do. This is a huge mistake. You likely can't ever do this so quit fooling yourself. If you could you would likely already be in his place. Your not and so that tells you something. It's like saying that you will be a Michael Jordan just because you play a decent pick up game. Doesn't make much sense does it when you look at it like that.
However unlike most want to be basketball players you can beat the pros from time to time because your account is smaller and you are much more nimble than they are.
So you have had a good day. You are happy. What should you do?
Most of the time here I give you trade strategies, but not really a plan. There is a difference trust me.
Entering the market in the first place is about ROI not wins and losses. You must have daily and weekly goals that you set for yourself. A set of rules to follow and the discipline to stick with them even if it is not working the way you want. Not easy is it?
I have daily goals that I set. I trade mentally with several systems that I know the rules of like the back of my hand. Most days I do alright. Some days I don't. There are 240 trading days in a year. Most weeks have 3 good trading days. Every 50 days or so the market will trend. Each day has a time that is good to trade and not so good depending on the market.
You need to know all these things in advance. Do you you know where you may wish to execute and why? Do you define these ahead of time or do you just "go for it"?
How much money do you want to LOSE each day. This is what you must know ahead of time. That will keep you humble. You never look at wins first. Never!
When you hit your numbers that you need to produce your weekly or monthly ROI do you keep trading? Some will say you should. I say different.
In my opinion you should stop trading once you hit your goals and fulfill your daily plan. It is far too competitive to keep executing. You will in all likelihood give it all back and then some.
So Stop when you hit your daily goals. Don't get too greedy. Close your station and go do something else you love to do. Day trading is a battle and it wears on you as the year progresses. If you overtrade and overanalyze you will inevitably become mentally fatigued and this is where you will lose. So don't do it. Cheers!
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