Here’s what you should avoid if you’re new in the markets

All day traders need to win their share of the market, while learning what works best, but Michael Sinsear of MichaelSincere.com identify ten common and potentially crushing mistakes especially new traders should avoid. Day trading sounds so simple, right? After all, is not this just sitting at the computer all day, buying and selling shares … and gaining profits? Well, not exactly. Few people realize how much experience and skills are needed to make money as day traders. It is easy to stumble errors, especially during the first year.
Here are ten of the most common mistakes that many day traders make.

1. The lack of plan
“The most common mistake that traders make is entering the trade without a good plan,” said Tony Turner, author of A Beginner’s Guide to Day Trading Online. “Almost every error can usually be due to trade without a plan.”
Too many rookies day traders enter the market without assessing that they wade in potentially dangerous waters. Defensive planning against losses means determining your input prices for the purchase of a share, the price you exit and price of escape, also known as stop loss.

2. Misuse margin
If there is something that can destroy login daily trader, this is margin. This is when you take borrowed from the broker to buy securities. If used correctly, the margin is a valuable tool that can increase profits and give traders breathing room. Margin when used improperly, financing deal with borrowed money can be hazardous to your wealth.
In the past, many people have abused margin, borrowed from the broker more than they could afford. This is destroying the accounts of many traders and helped to give a bad name daytrading. Best to trade with money you actually have, not with borrowed money.

3. Pursuit of transactions
One of the most common errors in Day Trading is the pursuit of fast moving tools on their way up or down. This is more likely to lead to a losing trade.
“When we see that a tool goes higher and higher, we all want to join the party,” says Turner. “The problem is that experienced traders go through the back door, while new traders arrive.” If you miss a tool on its way up or down, leave it. There will be other opportunities for trade.

4. Not understanding the market and pending orders
There is no consensus on the use of what is best – market orders or limit orders. Market order is an order to buy or sell an instrument at the current market price. With a limit order, you can specify the maximum or minimum price for trading a particular tool. Market orders are executed quickly, but remain the market to control your order. In contrast, limit orders allow to control parameters.
“Now that spreads are a penny or two a lot of shares, limit orders no sense,” said Deron Wagner, founder and head trader of Morpheus Trading Group. “You can not miss fast-moving action just to save a few cents.” With high-quality liquid shares, you can use any one market or limit order.

5. Listening to advice
At least once almost every trader was mistaken and bought shares on the basis of advice from convincing sources. Even when advisers are right, they are not there to tell you when to sell. It takes a lot of self-control to keep your ears closed, but dei successful traders rely on their own judgment and not on what others say.

6. Refusal to limit losses
It’s human nature to hope that the loss in share will be paid. But if you’re dei trader refused to reduce losses could harm your account.
“Instead of hoping a share to back up, take the money and transfer them to share that really goes up,” says John Krusiko day trader, host of Day Trading Radio. When a stock is headed south, be disciplined enough to prevent a smaller loss to turn into a much larger one.

7. Trading too early or late in the day
First and last 15 to 20 minutes of the trading day is usually chaotic, as market orders submitted by worried investors rushing to make moves closer to the time of opening or closing. Also compete with institutional and high-frequency traders.
“The first and the last 15 minutes are too volatile for new traders,” said Kurisko. “It’s like the Wild West, and sometimes there is no rhythm or reason to it. Also, the indicators do not have enough data so that they will remain volatile.”

8. To allow your emotions to rule over you:
What is needed to become a better trader? Discipline. “We need to develop a set of strict rules to take the emotion out of trading,” said Kurisko. “Most day traders use technical analysis.”
For example, Kurisko use stochastics indicator used by many traders to determine whether a stock is overbought levels or oversold. If a stock is oversold, then he started buying it. “You have to listen to the charts, and not in the news,” he added.

9. Availability of unrealistic expectations:
Some day traders recruits continue to look for something magical, which will bring them easy profits. Some have already calculated how much money they plan to do in the market. Unfortunately, the market has other ideas.
“Look no silver bullet,” says Wagner, “because there is not one. Some people will jump, looking for different tools and strategies without having an honest assessment of yourself. There is no easy way to play the market.” He says that traders need strategy, rules and discipline to become profitable.

10. To enter the uneducated Day trading rooms:
Uninformed think that anyone can make money with Day Trading. But to be successful in this, you will need the training.

“If I lay on the operating table, waiting for your surgeon to remove your appendix, you do not want to enter this surgeon, reading instructions” How to remove the appendix in 10 easy lessons, “says Turner.
To be constantly profitable trader, it says you have to start with virtual transactions, and then to study hard for you to understand how the market works. “To learn Day trading successfully can take as long as is necessary in learning to college and obtain a bachelor’s degree.”


Read more:
If you think, we can improve that section,
please comment. Your oppinion is imortant for us.
WARNING: Any news, opinions, research, data or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. Varchev Finance Ltd. expressly disclaims any liability for any lost principal or profits which may arise directly or indirectly from the use of or reliance on such information. Varchev Finance Ltd. may provide information, quotes, references and links to or from other sites and blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the sites, blogs or other sources of information.
Varchev Finance