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Day Trading Tips To Turn Amateurs Into Pros

Day trading can be an enjoyable way to make money. But it's not as easy as most people think. Here are some day trading tips that can aid the beginner and the more experienced trader to help you reach your goals faster.

First: Be careful not to over trade. The majority of the time the market is a random walk - meaning that it's moving without any rhyme or reason. Amateur traders taking small positions in the market are behind these unpredictable movements.

These amateurs do not affect the long-term movement of the market. The professionals, with their large volume and their willingness to hold positions longer, are the ones who create sustainable moves in the market that can provide meaningful profits.

Many traders are lured to day trading because of the energy of the business and the potential for big profits. This mindset is not helpful. The pros keep their powder dry for long periods of time waiting for a high-probability situation to happen. They are much less active than beginners think.
Second: The trend is your friend ... sometimes.

The trend is a fair weather friend!

It is your friend early on. But trends get "tired" and eventually end. So the full axiom is actually, "The trend is your friend, until the end."

Therefore there are 2 times to trade when you can put statistics on your side:
Early in a new trend.

Late in an old trend.

Taking positions at these 2 times put the stats of the bell curve on your side.
Third: Listen to free chat rooms for day trading tips and do exactly the opposite!
The biggest benefit usually doesn't come from listening to the room leader. It often comes observing the chatter of the participants while they comment on what trades they are getting into.

As you may guess, the majority of the time they are completely misguided in their approach.

They represent the collective voice of the unprofitable masses. It's uncanny how all the amateurs think alike when it comes to analyzing the markets. If you follow them in the chat rooms long enough you'll pick up on the patterns of the things they do wrong over and over. Then you'll learn to do the opposite and win.
One of the most typical errors I find people do in the rooms is trade against the trend. You hear the same comments over and over: "This market can't go any higher now for sure." "It definitely has to turn around here now." "OK, the market is now way over-extended."

It's uncanny how the retail traders as a group, seem to be determined to find tops and bottoms. For some reason they have a hard time trading with the trend and seem obsessed with trading against it. Of course this can spell big money for you. Once you know what the amateurs are doing, you can make money be trading against them.

Day trading can be very profitable, but to succeed you must not align yourself with the masses. You must avoid the herd instinct that drives the losers. Use these 3 day trading tips to help you on your journey toward being one of the minority who succeeds.

Dr. Barry Burns is the president of Top Dog Trading, writes a day trading blog and offers a free 5-day video course which offers day trading tips. He has addressed DayTradersUSA, "Elite Masters of Trading," and Traders Expos.






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