- Be Patient – Patience is everything in day trading. When you are about to enter a trade, hold your nerve till you actually get the entry price you wanted. It will come. And if does not come, don’t take the trade
- Be Aggressive – When you are ready to take a tradeand are sure, be ready to go big on it. Do not be afraid of losses. Being aggressive is not taking too many trades, it is about taking a few good trades, and betting big on them
- Correct your mistakes – You need to keep great stoplosses. And be ruthless about executing them
- Be Observant – This does NOT mean look at market all the time. In fact, you should only look at the market once in a while to study it well, and not look at your floating P&L through the day. It is stress
- Bet Size Correctly – If you take large bets which you cannot afford to lose, your emotions will f*** you up. Only take trades you can manage emotionally, with the money you can afford to lose
- Trade for the right reasons
- Do not trade to get rich quickly. Does not happen
- Do not trade to get a kick. Go play blackjack in Las Vegas for that with a 100 dollars
- Do not trade to recover lost money. Never ends well
- Do not trade to meet a financial objective like a car or a house or something. Trade because you see a good trade
- Never trade in an emotionally unstable place
- Put in the number of hours – Start slow, invest a lot of hours studying. Learn about technical analysis, open interest, volume analysis, candlesticks etc. And for Christ’s sake do not not trade because that dude on XYZ channel thinks the stock will go up based on fundamentals. Nothing changes fundamentally in any stock in 5 hours.
- Trade Rarely – Be super selective about your trades. If you are stuck in the wrong trade you will not get the right trade. And to get the right trade it is necessary that you are not in a wrong trade. Yup, it is like dating. And much like dating do not trade too many stocks. Can’t handle one 😉
- Take breaks. Enough said
If you liked this answer, you can see more on our trading manifesto page by Sensibull. This page attempts to give traders the right advice on trading, to manage the mind, and to keep things real.
Please share and comment if you found this useful
There is always a next trade is a great way to avoid reckless trading. What I can’t wrap my head around is the idea of “does this trade not look good or do I lack the requisite knowledge to assess it correctly ?” How do I get past this dilemma?
This is based on the fact that my knowledge about the derivatives universe is probably at 60%
It would be great if you could answer this or guide me towards an article or video that does.
Thank you