PostHeaderIcon The Biggest Dilemma in Trading

There will always be firsts; in online stock trading, you will probably encounter more than your fair share. You need to know how to go about your first few encounters with day trading because you cannot simply go about day trading haphazardly. There have been occurrences when day trading has had only moderate results instead of optimal ones. In order to start making some gains, you need to understand what you need to do. The key is patience and diligence-both of which need to take time, especially if you’re just starting out.

One of the best ways to start day trading is to start small. Whenever you start out small in trading, you are able to minimize your risk while building your confidence. If you lose money, you’ll only lose a small amount. And whenever you experience gains, it only adds up to the confidence that you have as an online trader. You should also probably get into the habit of reducing your lot size whenever you experience a downward trend and lose a lot of money. If you are already losing money, why should you lose more money when you could essentially lose even less?

One of the things that you have to know about trading is that you have to plan your entrance, the trade itself and how you’re going to go about it, your exit and finally, your emergency exit plan.  For example, you will be trading at least 100 shares of your technology stock and your risk on the trade from the entrance to your stopping or vice versa is 1 point, and if you are only trading 10 shares, the most that you can lose on the trade is $10. Compare this to a trade where the potential loss on a 100 share trade with a 1 point stop loss would be $100. This will be very handy if you know that when you stop trading, your potential loss will be much less.

The analogy for this is like playing blackjack. You would like to minimize your risks and keep them as low as possible during your play until you learn the different lessons that you need to learn in order to gain the experience that you need in order to succeed. Always be mindful of these risks during day trading because you might lose more money that you’ve expected to. Take every learning and apply them immediately. That way, you lose less and gain more experience which will someday pay off when you make the right decisions.


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