Being a day trader isnt for everyone. Opening a scottrade account does not automatically qualify you as a trader. As a matter of fact, you have to be a little special to make your living in this manner. Youve got to be cool, calculating, and always ahead of the most slippery of animals-the markets you trade in. But more than that, you need to know yourself.
You may think you know yourself, but being a day trader will teach you who you really are. And this fact is one of the most important and long-lasting effects of being- day-in and day-out, riding the wave of uncertainty. If you have any self-doubt, a propensity to be negativite or an inflexible ego your goose will certainly get cooked before you can say this must be rigged. But if you have the ability to recognize your weaknesses honestly and take them head-on, the benefits can be much more than just financial.
But, alas, its only human to have moments of weakness and it becomes necessary for a successful day trader to develop a system not only for trading, but also for keeping the spirit tuned up and ready to rock and roll. This is a neglected yet most essential part of trading. The following is one method used by the author to mold a rather tentative and crude trading head to a survivor of fifteen years of making a living on delta (change).
Clearing ones mind of extraneous thought has been a key tenant of day trading years. In todays world of information overload, we are constantly bombarded and overwhelmed by media of various sorts. A trader must not let their mind get cluttered by the constant distractions. More importantly, a trader must keep a positive and optimistic attitude. How does one do that?
There are numerous books on self improvement and spirituality that offer many methods and philosophies. As for the author, I found a very practical and effective system as expounded in The Handbook of Higher Consciousness by Ram Dass. In his wonderful book, Dass makes the connection between emotion and programming the brain. We learn by a powerful combination of emotion coincidental with a learning experience. An example is when you are frightened or angry; we are at our most vulnerable to program-in behavior because of the chemicals and hormones amplifying behavior. Thats why we sometimes act very irrationally because we were programmed when we were children and we keep responding to that infantile conditioned response. Dass recommends a very easy way to reprogram ourselves. We need to stimulate emotion at the same time we program instructions to our brain. He suggests that we cover out head with a pillow and scream into the pillow no negative thinking over and over again. The more emotion, the better. My friends, it works for me. When ever I get negative, its to the screaming pillow I go. Maybe it will work for you.
Because of my need to keep positive in my trading (keep in mind that a trader may have almost as many losing trades as winners), I learned a valuable technique that helps me keep positive in all situations-all the time. Without my pillow, I would have probably been like most normal traders when going through a losing streak . lose my cool. When you lose your cool, fear and doubt can push you to abandon your system and with it- your capital.
You may not need a pillow, but you should find a way to keep centered and positive. Theres a lot of literature on the psychology of trading and investing. Believe me, under- standing your-self and how to be above the fray is as important as a good trading system. Moreover, your self-awareness will help you immensely in all aspects of your life.