Tuesday, November 23, 2010

Day Trade + a little bit more

Today I was able to make two day trades on TNA as I tried to catch some strength in the market.  My first day trade was a loss and the second one was a gain which left me flat to slight loss for the day. 

However what I wanted to discuss more in this post was one of the novice traders problems, and that is not trusting in yourself.  Everyone in the market will eventually develop an edge and something they are good at.  My edge is technical analysis because I love pouring over charts looking for hidden patterns.  I also have my day trade system that is based on a momentum indicator that seems to work pretty good.

These are my edges, this is what I stick to.  My day trade system gives me a clear signal of when I need to buy in.  When that signal hits, I don't stop to think about if I should enter this trade or not.  I do not fear for a loss or even fear for a win.  I have no fears of the market because I am trading my edge. 

The market was trading down over 1% for almost the entire day, and here I was playing a stock that was betting the market to go up.  As I said, my first trade was a loss.  I entered the trade as soon as I received the signal and exited it the same way.  I traded my edge.  Second time around, I got the same signal and again placed the exact same trade without thinking twice.  However this one ended with a profit.  Again, I traded my edge.

I trust my system as it has been tested and has worked in the past.  I would still place the trades even if that last three trades were losers, or the last ten.  You have to have confidence in yourself and your trades.  Don't stop yourself from placing a trade because your last trades were losers, or winners.  There is nothing worse than waiting to place a trade by thinking about it to long and watching it run in the direction you thought while you sat on the sidelines.

Develop your edge, trade your edge, and it will take care of you..

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