In a job like day trading, it's easy to get caught up in the hustle of the trading game. But too many of the mistakes made by day traders are amateur mistakes. Though mistakes happen, some are too detrimental to a trader's account. Don't follow the crowd, rather, learn from the their mistakes so you don't end up repeating them.

Trading Without a Written Business Plan

Day trading is a stressful environment. Because of the emotional tension day traders face, writing down a plan before impulsively acting on a trade is strategic. In this written plan, traders should have a detailed list of how they're going to accomplish their goals, what they will trade, what markets they will trade, how they will enter and exit, and the contracts they will trade.

Misusing Margin

Margin is borrowing from a broker to buy securities. When used correctly, margin is a great resource for day traders. Conversely, when a day trader borrows more than they can afford, it could eliminate their account.

Trading too Large for Account Size

Similarly to misusing margins, trading too large for the account size is a novice mistake of a day trader. Though they may be gaining large sums of money, it is likely they are loosing large amounts of money as well. A fluctuating account doesn't promote a stable future in day trading. It is important to learn how to manage both winning and losing trades, so that they acquire better market analyzing skills.

Listening to Tips

Though a source may seem persuasive, it is both unethical and foolish to listen to tips about a trade. Most day traders only get tricked once before they never make that mistake again. Eventually, they start to listen to their own sound judgement. If you're a day trader and think you may have accidentally broken the law by following one of these tips, turn to a defense lawyer.

Lack of Discipline

There is a significant difference between planning stop loss orders, or damage control, and actually carrying out those planned stops. Acting out those stops is where discipline is key. Knowing when and how to stop bad trades and manage a trade, will keep the day trader out of trouble, and set them on a stable path to success. This is not a one time rule because it takes self-discipline to honor the stops planned out by the trader.

Trading too Frequently

Just like trading too large for their account size, a day trader also needs to set a limit on how often they trade. Making too frequent of trades will give them a few good days, with a lot of bad days.

Any of these six mistakes are small enough to avoid, and big enough to ruin a career. Day traders should plan strategically, and discipline themselves to follow their plans for successful trading.

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