Yes, nothing in life comes easy, as we all will know. Likewise, when making day trading your full-time or part-time job, you can also encounter difficulties. Luckily, one of the top financial analysts at Olsson Capital identified some of the top day trading difficulties and provides traders with easy solutions for each of them.
There are too many markets you want to trade on
Traders often feel like tumbleweed when it comes to trading as the amount of information out there is completely overwhelming. With so many different markets to trade on, each with their own risks, day traders can easily feel pressured to trade on as many markets as they can. This, in turn, turns into a snowball effect as the trader can no longer keep track of all the markets traded on and may miss profit margins quite easily.
The solution: Before deciding which markets you want to trade on, learn as much as you can about those specific markets. Take into consideration factors such as market volatility, market strength and your own unique day trading strategy. Ask yourself the question, how will my trading strategy help me to trade this specific market and will it make my profit margins bigger?
A simple thing called Confidence
Many traders have huge difficulty when it comes to confidence in day trading. Having good confidence when executing a trade is essential as when you hesitate for even a second, you can miss your profit window.
The solution: The best way to give your trading confidence a boost is testing your trading strategy again and again to make sure it will give you a profitable return. Another simple way of boosting your confidence is taking a look at your lifestyle outside your day trading ventures. Ask yourself these questions: What lifestyle factors impact my trading performance and what lifestyle changes can I make to further improve my confidence?
Taking a wrong turn when making your trade
There are quite a lot of difficulties when it comes to getting ready to make a trade. These difficulties include not placing a stop-loss when you move into a trade as well as closing your trade too early, thus limiting your profit.
The solution: When trading, you are bound to make mistakes along the way. Keep a journal and write down the mistakes you make when you trade. That way, you can look back onto them and ensure you don’t make the same mistake over and over again.
Expecting the unexpected
The best thing for a trader is not to expect anything at all. We are all human and all want to succeed when trading but becoming greedy and setting the bar too high won’t get you the profit you could get when doing things right.
The solution: If you make a successful trade and see the figures coming in, do not get over-excited. This will only make a burrow for greed in the back of your mind. Play it calm, keep trading according to the strategy you have set out and keep in mind that you should not expect more than your trade entitles you to get at the end of the trading day.
Running around in circles
When you are in constant search of information about the market you are trading on or keep repeating the same trading mistakes, you will soon find yourself running around in circles. For any trader, this is not a good thing.
The solution: Find a trading platform at proved you with the latest and most up-to-date information about the markets you are trading on. Some platforms even have Apps with push-notifications so you will get the information even when you don’t have access to a computer at a specific point in time. In order to prevent yourself from repeating the same trading mistakes over and over, go back to your trading strategy and ask yourself this question: What can I change to prevent this mistake from happening in the future?
These trading difficulties, now with solid solutions provided, will definitely help you to make trades with precision, confidence and the ability to make your profit margins rise substantially.