Fortunes are made and lost through stock trading. A day trader is particularly susceptible to making and/or losing money on a consistent basis. Avoiding the three most common mistakes made by new day traders can minimize the typical high risk to improve the odds of winning.
Day Trading Is, By Definition, Risky
All day trading definitions are similar. A day trader buys and sells securities throughout the trading day and closes all activities by the end of the daily period. The opposite of a buy and hold strategy, this action plan involves taking wins and losses daily.
Look at the many daily highs, lows, and overall volatility of online stock trading. Clearly, the risk/reward quotient is always high on both sides of the equation. Daily online trading can generate large profit and devastating losses.
A day trading strategy requires that the investor minimize risk and avoid common mistakes. The vagaries of the stock market will generate its own results without negative assistance from the trader. (more…)