20 DOS & DON'TS OF DAY-TRADING
DOS:
1) Be patient--don't just dive into a trade
2) Develop a proven strategy--don't just trade blindly
3) Trade what you know and understand--if you cannot explain
it, why trade it?
4) Check the daily news on your stock before you trade--stay
informed on upgrades/downgrades/earnings etc...
5) Do a quick risk/reward analysis before you place the
trade--put yourself in a good position to make money
6) Watch a stock's trading behavior for a while--learn its
"personality"
7) Cut your losses short and let your winners run--basic, but
effective
8) Get into a pairs trade if your initial trade is not
working--reduce your risk
9) Trade with the markets that day--shift your deltas according
to market conditions
10) Anticipatre the unanticipated--always have some
offsetting position just in case events reverse
11) Live to fight another day--no cash means no trading
12) If you have a hot hand then work it, if you don't then
consider folding--recognize your rhythm
13) Know yourself--trade within your comfort zone
14) Stay focused--rid yourself of distractions
15) Trade with simplicity--don't overthink things
16) Stay positive--negative energy can impact your trading
behavior and results
17) Learn from your mistakes--mistakes are inevitable so use them
to your advantage
18) Drop your ego at the door--it's ok to take a loss, it's part
of the game
19) Take a deep breath--it's going to be ok
20) Read as much material as you can on day-trading
strategies--knowledge is power
DON'TS
1) Don't get emotional--the market is benign to your
feelings
2) Don't over-leverage into bad trades--reduce your risk, not
increase your risk
3) Don't get in all at once in a trade--build your position piece
by piece
4) Don't get greedy--fade the trade and book profits
systematically
5) Don't trade purely on technicals--fundamentals
matter!!
6) Don't stuff your plate--trade a manageable number of stocks at
one time
7) Don't trade solely on candlesticks---make sure you have a
technical study set applied
8) Don't catch "falling knives" or short "rocketships"--wait
until the trend is exhausted
9) Don't force yourself to trade--trade when the opportunity is
right, not because you have to
10) Don't trade like a compulsive gambler--trade under
control
11) Don't get caught up in the media noise/market hype--"those
who know don't tell; those who tell don't know"
12) Don't trade on stock tips--be circumspect of other
motives
13) Don't gloat over or brag about your last trade--focus on your
next trade
14) Don't feel as if you have to get all your money back at one
time if you sustain losses--take it one day at a time
15) Don't get discouraged--even the professionals get
burned
16) Don't give up a gain when you have it--it's ok to make a bad
trade, but inexcusable to give up a gain
17) Don't get cocky--the market is bigger than all of us and can
reverse your fortune at any time
18) Don't think this is a way to generate "easy" income--if it
were so easy, noone would ever work another job
19) Don't take your trading home with you--divorce yourself from
the market because it's not your whole life
20) Don't put all your eggs into one basket--stay diversified
with your financial wherewithal