| Although it has been some years since I was actively | | | | potential trades. |
| involved in trading, I have just returned to the | | | | Experienced day traders, on the other hand, are fully |
| markets and have begun to trade a small account on | | | | aware that, with little time available to execute their |
| my own behalf. | | | | trading, they must have a process plan and they |
| This has perhaps given me a slightly skewed | | | | must stick to it. |
| perspective of the markets, almost like a new | | | | A day trader will set out his (or her) plan of action |
| entrant, but one with a lot of experience. | | | | something like this: |
| There have been some big changes whilst I have | | | | 1. Recognize the opportunity, enter the market |
| been inactive, not least in the number of online | | | | 2. Stay in the trade for as long as possible if it is |
| brokerages fighting for every dollar. | | | | going for him or |
| But many things stay the same, at the heart of | | | | 3. Get the heck out of there with minimum losses, as |
| which is one, I guess, unbreakable truth. Trading is | | | | soon as it is clear it is going to go the wrong way |
| basically a very simple business, with any trading - | | | | That's it! |
| stocks, options, FOREX, whatever - only really | | | | That's essentially what a day trader in any market |
| involving three steps: | | | | was doing years ago, and that is what a day trader |
| 1. Find several possible trades evaluate them and | | | | is still doing today, with little or no change to their |
| decide which to go for, | | | | working practices brought about by the vastly more |
| 2. Calculate how much to trade, and decide at what | | | | advanced technology of today. |
| points to enter and exit the market | | | | Savvy day traders learn very quickly that they must |
| 3. Keeping an eye on, or monitoring, open market | | | | plan ahead of time, so that they are in prime position |
| positions | | | | to take full advantages of the opportunities that |
| Now, these three steps were basically all there was | | | | occur in real time. |
| to it a few years ago, and they still And, guess what, | | | | Thus, day trading, which on paper at least is a pretty |
| people are still getting totally bogged down right | | | | dangerous and risky manner of working markets is, in |
| here, at this early stage of the trading process, | | | | fact, one of the most disciplined trading schools! |
| generally, for one of two reasons. | | | | By the nature of market movements and the way |
| The first possible reason is that they simply are not | | | | they operate, day traders simply cannot afford to |
| aware that these are the steps involved in the | | | | run their trading business on a wing and a prayer! |
| trading process, or (the second reason) they have no | | | | Day trade with discipline and there is good money to |
| clearly defined rules for actioning these steps. | | | | be made. Trade without it, it's a one way ticket to |
| Thus, less experienced, more nervous, traders can | | | | the loans queue! |
| often take hours to evaluate a small number of | | | | |