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Day Trading Tips For Making Money in the Real World

Sep 4, 2008
Day trading can be a thrilling way to make money. But it's more challening than most beginners think. Here are some day trading tips that can help the new trader as well as the more advanced trader to achieve 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.

It's more accurate to say that 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:

When a new trend is just starting.

When a trend is getting "tired."

Trading only at these 2 times allows you to put the statistics of the "edge" of the bell curve on your side. Trading in the middle of a trend, puts you solidly in the middle of the bell curve where anything can happen.

Third: Listen to free chat rooms for day trading tips and do exactly the opposite!

The benefit of chat rooms is often not found in listening to the moderator. It comes from listening to the comments of the participants as they reveal what trades they are taking.

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

They expose the collective thinking of the unprofitable amateurs. It's scarey to notice how the amateurs all reason alike when it comes to day trading. If you watch them in the rooms for several months you'll begin to identify clear patterns of things they do wrong over and over again. Do the opposite and profit.

As an example, one of the most common problems amateur traders have, is resisting the urge to fight the trend. You'll often hear comments such as: "The market can't go any higher than this." "This market just has to turn around at this point." "The market is definitely way over-extended now."

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.
About the Author
Dr. Barry Burns is the president of Top Dog Trading, authors a day trading blog and offers a free 5-day video course which offers day trading tips. He has spoken to DayWealthUSA, "Elite Masters of Trading," and Wealth Expos.
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