How To Enjoy Your Trading Success
04/18/2008 12:00 am EST
Trading discipline is a fast track to trading success. Disciplined, working strategies will statistically win in the long run. But how should you celebrate your trading success and make the most of your wins?
Day Trading Mentality
Day traders who make a quick profit are the first to celebrate trading success. The small intraday movements in price are enough to keep day traders happy with their positions. The most important thing to remember is even with a comprehensive trading planning losses is inevitable. Statistically, a win only brings more losses, but the biggest trading secret is that a few wins can easily strike out many small losses.
For day trading with a small account, trading success should send the trader to increase his or her stake. Your trading capital must grow over time to cover your own cost of living, as well as provide a "pay raise" over time. To obtain financial freedom, a day trader must have sufficient capital to both weather losses and collect big gains.
The Biggest Fallacy in Celebration
After a big win, the greatest fallacy a trader enacts is changing his or her trading structure. Too many times, an over-confident day trader makes trades based on "gut" feelings, rather than basic trading fundamentals. However, in this scenario, the trader eliminates strategy, instead entering the gray zone characteristic of gambling. Remember, the difference between gambling and day trading is proper money management. Proven techniques and strategies are profitable in the long run because they have set criteria for each trade, rather than just a stab in the dark based upon "gut" feelings.
The Greatest Gift of Success is Education
Learn from your successes. Indeed, the greatest gift of trading success is the education it presents you. Chances are that you placed the trade because of your own trading system and analysis; review the details surrounding your trade (ideally in the trade journal you keep) to develop a core of strategies that will produce winning trades.
Give Yourself a Brokerage "Present"
Boost your own trading profits by topping your account. Day trading with a small account is very limiting. After a big win, add some of your own personal funds to your account to keep your success. Undercapitalized accounts are the first to falter when the market turns. Investing in you can be the difference between profitability and simply getting by.
For large wins, you might even consider quitting your day job. Many people have found financial freedom through day trading. If the time is right and you have bankrolled a significant balance, making day trading or swing trading a career can be both profitable and rewarding. Quitting the 9-5 is the ultimate way to celebrate long-term trading success.
About the Author:
Leroy Rushing is an active, professional day trader; trading coach; and author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide