Online Day Trading: The Importance of the Right Mindset
By Afshin on May 27, 2009 in Articles
There is an old saying in trading– take your money, put it in your backyard, douse it in gasoline and set it on fire. What this means is… number one, you shouldn’t be using the kids milk money to trade the emini futures or the forex markets. But also, you cannot be attached to the thought of losing money either.
Some of the worst traits come from individuals who have a deep attachment to their money— and on the opposite end of the scale— those who really don’t care about their money.
To be effective at online day trading, you cannot be a crazed lunatic and trade everything that moves with no care if you lose money. On the other hand, if you are very attached to your money to the point where you cannot stand to lose, you will not win either. Every time you take that inevitable loss, or string of losses, it’ll get to you.
The successful mindset is the golden mean—which is the one right between these two. What is a powerful and simple way you can develop this useful mindset? The trading journal and simulation trading.
It’s a shame, but many individuals overlook these. Becoming a successful online day trader is about pattern recognition, practice and record keeping. When you continue to practice and keep a recorded trading journal you will get good at recognizing patterns in yourself and the markets.
Keep a record of your simulation emini and forex trades. Everything from your entry levels, stops, exits, the patterns you recognized, why you entered your trades. All of these can be very important so you can see your strengths, weaknesses and biases.
