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It is common and frequent that
we receive inquiries from traders and day traders who address the question as to
what profit targets they should run with or how do they decide what amount of
profit targets they should aim for. Many traders overshoot their profit targets
or set their profit targets too high because they want to make a lot of money,
fast. This is a wrong move for any trader. Stretching for the stars is always a
good hot dog to hang in front of you, something to make you reach for, a goal to
reach. However, when traders set their profit target too high to reach on a
consistent basis the only target reached is that of frustration and loss of
confidence. Why would you waste your time? Making the greed mistake once should
stick with any trader and the pain of tangling with greed should never be
forgotten.
Smart traders will set their
profit goals low enough to reach but high enough to make you work for it. Day
trading is a job. Successful day traders work for their money and so shall you.
Baby steps are a requirement
for any successful day trader. Successful ‘newbie’ day traders go into day
trading by setting their daily profit goals, based on making all demo trades.
Remember that you should not you’re your live trading profit potential on 100
percent of your demo trading profits. A percentage of your demo trading profits
must be deducted for an estimate on what you expect to make during live day
trading. Foolish mistakes are made by those traders who jump into trading using
real trading capital. Think about it, why would you when you have the comfort of
demo trading?
Day trading has changed
dramatically over the past 10 years in so many ways. Ten years ago, stocks were
traded in fractions. Ten years ago there was no ‘Day Trading Rule’. Ten years
ago terrorism wasn’t something you worried about. Ten years ago commissions per
trade could range as high as $38.00, one way because you only got what you paid
for. Seven years ago the Twin Towers stood proudly in New York. Eight years ago
Americans were dealing with the hanging chad and the unknown Presidential
winner.
Ten years ago successful day
traders focused on dedication to individual trading strategy; no emotions while
day trading no matter their gains or losses; no greed and a realistic daily
profit goal. In addition, successful day traders did not try to duplicate the
trades or trading methods of another day trader. For those of you who want to be
a successful day trader, you need to follow the same principles as the
successful day trader did ten years ago. Principles for successful day trading
won’t change; just the method to get you there may need to be altered, in some
way, shape or form depending upon the current trading atmosphere. Traders must
learn to adjust their trading strategy to meet the current market methodologies.
Like the current No Shorting Ban going on right now. No day trader uses the same
trading strategy today as they did a week before the No Shorting Ban took
effect.
These factors will be part of
how hard you need to work to reach your daily profit goal. Unknown factors at
any given time may call for you to reduce or alter your daily profit goal, for
the time being. It’s time to hang tough during these difficult market times.
Just remember, at any given time, feel free to
switch to trading in demo mode. Demo trading is a benefit that can be utilized
at any given moment. With the current volatile trading activity we all are faced
with on a daily basis, day traders are shaken out of trades, more often than
they would like to admit. Start small and work your way higher, one small step
at a time.
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