Is There Such Thing as Day Trader Psychology?

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True, day trading is an activity undertaken to improve our financial positions. Most traders that take up the exercise intend to be the exception to the rule that a high percentage of day traders not only do not become wealthy, but the majority also abandons the practice altogether in a short amount of time. Their withdrawal from the legions of traders may be due to many factors:

  • Ran out of money
  • Became disillusioned with small earnings
  • Trading just seems more difficult than expected
  • Unable to cope with the reality of losses
  • Broker fees are consuming most of the profits
  • Too stressful – can’t handle the pace
  • Fear of losing whatever gains they’ve managed to accrue

Applying some basic day trading fundamentals when diving headlong into the activity is crucial to success, but that’s only part of the equation. Day traders need to have a psychological edge over other forms of investors that have the elements of time and market corrections to add security and a safety net to their decisions.

Focus is a one of the areas day traders need to develop to achieve success. It’s human nature to question your moves by comparing them to those being taken by others. These may be peers or opponents but in either case the element of psychology comes into play as you learn to set your sights on buying assets that make sense to you based on your personal evaluation of the stock or other vehicle such as market news, M&A announcements, earnings reports, and indexes that pertain to your investment strategy.

Market volatility further adds confusion to trader decisions that make you question your own decisions and doubt yourself. You may even find yourself changing the strategy that has worked for you over a long period of time over concerns for success in the long term. Extreme changes to trade strategy can find you chasing buying and selling under conditions that you would have not even considered in a typical trading session. This can introduce risk that causes negative results rather than boosting profits.

Day traders need to realize going in that this is not a typical business venture tied to the logical rules of running a profitable business. The mental aspects of day trading are as important to your success as knowing how stock markets or commodities function. A trading session may be up one minute and in the red 15 minutes later but close on a high note. The reverse is just as true – learn to cope with the ups and downs of individual buys and a daily trading session. You may want to kick yourself if you bail out of a successful trade that subsequently doubles or triples in value, but learn to appreciate your gains of every value instead.

Learning to Harness Day Trader Psychology to Your Advantage

By understanding that day trading psychology is part of the endeavor you can react more calmly to market surges and dives. SureTrader tools that allow you to continuously monitor your trades and make quick and accurate decisions can improve your trading confidence. As a leading online broker SureTrader web content can keep you informed of current news in real time that may impact your individual strategy. SureTrader also provides friendly and courteous support available to our clients on a 24×7 basis to help you resolve any problems.

SureTrader’s use of technology in both desktop and mobile applications ensures reliable access to our services – supporting both iOS and Android platforms. Access to services is available anywhere, anytime for quick and easy trades even in after-hours trading.

Contact SureTrader right away to get started doing online trading with the best in online brokers.

Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.

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