There is one thing in common among winners and losers in any gambling game- they will continue to gamble regardless of what happens. And what are the commonalities between gambling and day trading? Simple, there are losers and winners, most of them are gamblers.
Despite the fact that gambling and trading are two very different things; many traders seem to behave as gamblers instead of day traders. In gambling the winner would like to believe that he has an unstoppable streak of good luck and will try to ride his momentum until he gives all his winnings back to the casino. The loser, on the other hand, will try to get out of their bad luck by risking all his money in belief that he will be able to win back all the money he's lost. In trading unsuccessful traders work in this manner.
True trading is not like gambling though. Unfortunately, most traders who have not reached maturity tend to act in this manner and over trade for the same objective as a gambler.
Theoretically, day traders should be able to get over the practices of a gambler. He must try to evolve from this point until he becomes a strategist. This can only be achieved though through developing the necessary skills, the discriminatory attitude and the realization that the market moves in a certain way and this way should be discovered.
There are no secrets to day trading though. Everyone should realize that the behavior of the market is a bit predictable by using indicators and patterns which have existed before. Everyone should also recognize the truth that the market works in a psychological way and one must only develop keenness to this reality. Also, everyone should acknowledge that skills take time to develop and once they start to build-up, the trader will also start to become more efficient in the trade.
Over-trading does not work in this business. Those who practice this technique either have no sufficient knowledge in this field or have not out grown the common attitudes of the amateurs which depend highly on their priorities.
The most common reasons why amateurs over trade are a) they trade to confirm that they are good and that their system works, b) they are stretching their limits to prove that they can make profits whenever possible, c) they try to get off with the emotional burden especially when they are losing their trade by selling or re-entering the market if the signs are good enough for them, and d) just like the gambler they only want to take advantage of their luck to win back their losses.
Miodrag Trajkovic is an expert on information related to Day Trading, Day Trading Mistakes, Day Trading Strategies, Online Day Trading and Day Trading Systems. For more information visit his website http://daytrading.explore-me.com
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