Stock Trading Mistakes Part 2

Many novice traders start their career without a plan. Astute traders have a trading plan, or what others refer to as a live trading document.
This document clearly stipulates all the rules and laws the trader has to follow in order to have a profitable career.

Stock market trading is a business. When you decide to take you hard earned money and invest it in the market, you are essentially putting up capital for your business.

The stock trading mistakes that many beginner stock market traders make is that they don’t plan their business. They attend a seminar and pour their money into a brokerage account without fully the business aspect of stock market trading.

Successful businesses have solid business plans, successful college graduates had solid plans for their career paths, successful people plan ahead of time what their future is going to look in the next 1,2 or 10 years.

Every beginner stock market trader should have a live trading plan, where they chart their day trading activities and use their trading plan as a career map.

How to avoid stock trading mistake # 2

Create a solid day trading plan: your day trading should consist of the following:

A live plan means that you revisit your trading plan frequently and make changes as necessary. More importantly, you must follow the plan. It does the stock market trader no good to write this great plan and then place it a drawer to collect dust.

• What are you going to trade? Stocks, emini’s, currencies, futures? Decide what instruments you are going to trade and focus on mastering those instruments.



• When are you going to trade?To avoid stock trading mistakes


a. Are you the kind of trader who enjoys to trade gaps, or are you the kind of trader who enjoys scalping the lunch time moves. b. When does your trading day begin? c. At what time does your trading day end? d. When do you take lunch every day as a trader?


• What percentage of your capital do you allocate to a trade?



• How much money are you going to fund your account?

a. Remember the minimum requirement set forth by the SEC is $25k. Figuring that you are just starting out in your day trading career, you should figure that you are going lose some money. So just to be safe, a modest day trading account should have at least $50k.


• You need to determine where you are going to get your data feed from and what kind of platform you will be using as day trader.



• You need to factor in the costs of stock market trading platforms in your financial budget.



• You need to determine what kind of equipment you are going to using for your day trading activities.

a. Are you going to be using a laptop or a desk top with 4 monitors?


• In your day trading plan you are going have to find methods to measure your success as a trader



• You are also going to have to know where you are going to get your initial stock market education



• How often you are going to get educated. How often are you going to attend seminars?



• Where are you going to find support and mentors that can guide you through the first few years of your trading? These are the hardest years of your stock market trading career.

Stock market traders who have a solid day trading plan stack the odds of success in their favor when compared to those traders who do not have day trading plan.

When a trader forces his brains to focus on only what they have stipulated in their trading plans, they are better able to utilize their brains full capacity to achieve outstanding results.

The day trader that knows the path ahead is willing to hang in when the road gets tough, as they know and are prepared to weather the dark times before the sunshine.

Develop a trading plan, know and understand that your trading plan is a living document, as you advance as a trader, your trading plan will change.

• Stock Trading Mistakes Part 1
• Stock Trading Mistakes Part 3
• Day Trading Mistakes Part 4
• Day Trading Mistakes Part 4
• Day Trading Mistakes Part 4
• Day Trading Mistakes Part 5