Day Trading Tips To Give You An Edge
By Dr. Barry Burns
Day trading can be a fun and exciting way to make money. But
it's more difficult than most beginners imagine. Here are
some day trading tips that can benefit the new trader as
well as the more experienced trader to help you achieve your
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
These retail traders don't affect the long-term moves of the
market. It's the pros, with their large volume and their
willingness to hold positions longer, who create sustainable
moves in the market that can result in significant 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
Second: The trend is not always your friend. Perhaps the
most common axiom in trading is "The trend is your friend."
That is a half-truth.
The truth is that the trend is a fair weather friend!
It's true that the trend is your friend early on. But trends
get exhausted and end. It's more accurate to say: "The trend
is your friend, until the end."
There's two times when you can put the numbers in your
Trading at these two times lets you put the "edge" of the
bell curve on your side. Trading mid-trend, puts you in the
middle of the bell curve where the outcome is completely
- Early in a new trend.
- Late in an old trend.
Third: Participate in chat rooms for day trading tips and
do 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
The vast majority of the time they were dead wrong in their
They expose the collective thinking of the unprofitable
amateurs. It's scary 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.
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 is absolutely amazing to see how amateurs habitually
trade against the trend in an effort to find tops and
bottoms. They are constantly looking for the market to turn
around. As is always the case, you can profit tremendously
by taking the other side of their trades.
Day trading can be extremely rewarding, but to be successful
you must stand aside from the masses and avoid the herd
instinct that drives so many. These 3 day trading tips can
help you be among 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
trading tips. He has addressed DayTradersUSA, "Elite Masters
of Trading," and Traders Expos.
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