The idea is: you start a trade on your computer based on a signal, wait few minutes or hours, then exit with profit (or loss). High leverage, low brokerage and real time chart are all of the components of what so called “Day Trading” or “E-minis” Trading. Whatever the name it might be, you need to know few items below before decided whether it is all for you or not.

On the seminar (or more precisely: “marketing seminar”), the guy who sell the program tell you and show you how easy it is to make money from the market from Day Trading. Although generally is quite true that everybody that can click a mouse could possibly make profit on this most volatile type of trading, at the end the key to success is not the “how” but the “why”… And below is some of them…

Three Possible Reasons Why Day Trading or E-minis Might NOT Be For You

What mention below are actually in general also valid to all kind of sharetrading/stocktrading on the market. But due to the nature of day trading (fast, real time, high leverage) all of the factors below become much more hurdle for this trading scheme.

1. If you a macho man or macho girl who never let anybody beat you – this is not for you.

Why? No successful trader in the world have 100% winning trade. Maybe 30% or even 40% or more of the trade is a loss one. That’s mean about 1 out of 3 trades somebody else beat you and take your money.

 

 

 

 

What will you do if someone beat you and take the money from you ? The chance is you will re-consolidate, get another weapon or ammunition, and get even – this is exactly why day trading is not for you.

In a live and continuous environment, although receiving a valid and good buy signal, you can still be losing. And as you want to get even, you will just get back to the trade, ignoring your own system, as if the market is scare of you and willing to do whatever you say. If the result is still bad, you will have even triple motivation to get even. But if the result is now as you expect, then it become even very very dangerous situation as you think that you can beat the market when you want to.

The fact is, all the trade are basically random. Yes, with good system, in long term the number of losing trade will be outnumber by profitable trade  -or- your profitable trade give you much more profit percentage than losing percentage (e.g: every trade  has average profit of 20% but every loss only a mere 10% loss – then even it’s 50-50, you are still ahead)

So, if you really want to do successful Day Trading / E-minis / similar (actually share trading in general – but much-much worst in day trading), you need to be just cool even somebody take your money out right….

 

2. If You Cannot Lose Your Trading Account – this is not for you

Most of the trader probably will start maybe $5000 trading account. If this trading account is your mortgage for next month that you cannot lose it – then just forget it. When you start, whatever you deposit on the trading account, although you would prefer it, but you should be able to lose it all without a blink in your eyes.

As mentioned above, some of the trade are 100% guarantee a losing one. What will you feel if today’s trade activity makes you lose $1000? If you whinge and feel bad the whole day about losing $1000 in 10 minutes, then this is not for you.

 

 

 

 

 

 

 

 

 

Losing money should be a normal event. Yes, we don;t want it more than getting money, but losing money should not be a biggie for you when you want to do day trading. This is really different say if you invest in diversity portfolio and loss $20,000 due to market crash because of Global Financial Crisis, at least you can reason that everybody experience it and it’s not really your fault.

The feeling is quite different.  Losing $1000 in 10 minutes under your very eyes will give you some wondering: why did you take the trade? whether the system is good or not? (maybe you get ripped off), why you are so unlucky, why other people so lucky, etc, etc… This wild imagination will turn you into total failure in very short term if you cannot stand it – especially with the money that you cannot afford to lose.

If you are prepared to lose the whole trading account, having lost $1000, will just make you say to yourself “bad result, but don’t worry still got $4000 – tomorrow would be better” – at least on more positive spirit. And yes, if the trading system is really good on longer term, it will give distinctive result.

 

3. If you are not a discipline person or impatient – this is not for you

Day trading, even the time frame is  just a matters or minutes, need a lot of discipline and patience. Discipline to not or to take the trade according the trading plan and stick to it until the end. Patience to not just exit the profitable trade before hitting the profit target, or not exist a loss trade before hit stop loss target.

Some time you plan to target $200 profit, the trade has gone your way and now at $100 profit. Impatience people will just take $100 – you cannot get poor with any amount of profit they say. But remember the profit target is part of the system. For example the system is expected to have 4 x$200 profitable trade and 3 x $150 losing trade on average, giving you $350 profit in a day. But if your profit is only $100, $100,$100, $50, then the net result is minus $100 although you win more than lose.  If this happen, then you start have doubt on the system or your “luckyness” or something else where the real root cause is your lack of discipline and patience.

 

Well, that’s a start before you embrace your day trading career….

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