From past notes - would give credit if I remembered where it was first written, although I've seen these overview rules given before. Fairly good "rules of the road" for anyone contemplating day trading as a profession. Key word being "profession" because you'll lose your shirt if you aren't serious, focused and disciplined. Just like most professions it's not for everyone:

6 Common Mistakes Daytraders Make

#1 Distractions and focus
Amateur: Watches YouTube videos, is online at Facebook, chats in Skype or watches TV while trading. The amateur loses focus easily and does multiple things when there is no setup in sight or markets are currently slow. He, therefore, misses trades easily, makes mistakes when calculating his position and when executing trades.
Pro: When the professional trader is trading, he is 100% focused and does nothing else besides watching his charts. He might have a website open to monitor news releases or watch the news ticker on a TV channel (on mute!), but that's it. The pro knows how important it is to be 100% focused and when there is nothing to do and no trading setup in sight, he turns off his platform, works on his trading skills or just takes the day off.

#2 Wasting screen-time
Amateur: Amateur traders tend to watch charts for hours at a time and randomly flip through timeframes on the hunt for a trade. The myth that screen-time will help a trader become better is still accepted among amateur traders. Watching charts for the sake of it has no value whatsoever if you don't know what you are looking for.
Pro: The professional trader has a detailed trading plan (much like business owners Business Plan) and knows exactly what he is looking for and when he is going to trade. He does not flip through timeframes, but just waits patiently until the trade comes to him. He does not waste his time by sitting in front of his charts all day long when there is nothing to do. When there is nothing to do, the pro goes back to his trading journals and reviews past performance to find ways to become better.

#3 Overconfidence after a winning streak
Amateur: The amateur trader believes that after a few winning trades in a row he has acquired superior skills or that his trading strategy is suddenly a money machine and cannot fail anymore. The problem is that after a few winning trades, amateur traders use too much risk and take trades that are too big or violate their trading rules because they 'can feel' what will happen next. It's not uncommon that after 4 or 5 winning trades, traders lose all their profits on only one trade. Are you guilty of that too?
Pro: The professional trader knows that he is not suddenly a super trader and cannot predict what is going to happen next. A winning streak is normal and will happen time after time; it is just how trading works. A professional trader ALWAYS sticks to his plan, always follows his risk and money management rules and NEVER lets one losing trade wipe out a significant amount of his capital.

#4 Loss of confidence after a losing streak
Amateur: When having a losing streak, the amateur trader loses confidence in his skills and his trading strategy. An amateur trader tends to change his trading strategy when he enters a losing streak or breaks his trading rules because he wants to make up for his losses. Losing streaks are dangerous for amateur traders because they often lead to even bigger losses when traders try to make up for lost money.
Pro: For the professional trader, streaks don't matter. They are inevitable and will happen over and over again. A professional trader knows that over the long term, his trading strategy will make him money, no matter what. A professional trader sticks to his rules and never loses his mind.

#5 Taking losses personally
Amateur: It is hard to accept that your trade idea was wrong and that you are going to lose money. Especially new and inexperienced traders can't accept to be wrong and when they see that price is about to hit their stop loss order, they will do one of the following things:
Setting a stop loss further away to delay the loss
Adding to a losing position to get out of the loss faster when price turns around
Taking off the stop loss order completely because eventually, the price will have to turn around
All these tactics will lead to large losses and to margin calls. A trader who is engaging in one of the three mentioned scenarios is as far away from becoming a professional trader as possible.
Pro: The professional trader lives by the following two principles:
One trade is just one trade and the outcome of one single trade does not matter
The stop loss order is the price where you fully accept that your trade idea was wrong and where you WANT to exit the market
The professional trader knows that the outcome of one trade is totally irrelevant to his trading career. Whether a single trade is a winner or a loser does not matter because there will be 400, 500 or 800 trades coming soon where he can make money. A professional trader also accepts that a stop loss is the place where his trade is wrong and that he is happy to exit the trade because it is not going to make him money.

#6 Do you need money fast?
Amateur: What is your trading objective? Do you believe that trading is a way to make a lot of money in a short period of time? Research showed that traders who believe that they can get rich quick with trading lose the most amount of money.
Pro: For the professional trader, trading is a regular job. The professional trader does not trade for the excitement or because he wants to make a fortune with a few lucky trades. Trading is not an easy profession and it requires time, hard work and a lot of hustling before you can make money. In the end, being a trader is a job like many other jobs.

I was doing really well in my "small" daytrading account, and I was up 27% YTD until last Monday. I got cocky, broke all my rules, and got my tail handed to me buying SVXY and then walking away for a couple hours. Although a relatively inexepensive, still a very painful lesson to learn. Hopefully will teach me to follow the plan/rules and never get cocky with the market.

gigemJTH12 said:

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so what are the good buys

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I love SWKS. They crushed earnings and have a 2 Billion stock buyback announced. You can see a long time sideways action with major support and resistance lines formed. Right now it has held support again, even with the multi-thousand point sell off, and is poised to make another run at resistance. Once it pops through after this long of a sideways movement you will see a huge price appreciation occur. That's a winning chart technically and backed by fundamentals.



One of my long-term stocks has been Twitter. Buying the basement and selling half the shares to work into a "net free" long term position. TWTR has been the gift that keeps on giving - buying anytime it touched the green major support line and selling as it approached that middle red resistance line. The upper red resistance line is the next resistance mark now that it broke through the shorter term resistance. To me their earnings model turn-around (as predicted) is now starting to show on the quarterly's and now that it has broken through resistance I see TWTR moving to $37 into their next quarterly earnings. Should they continue to improve bottom line numbers then it will test the $50's.



EXPE is a stock I shorted before earnings. You can see the prior earnings disapointment sent the shares gapping down hard before finding volume support. It traded sideways into current earnings with a "trap play" rise into earnings. Having seen that movie before I entered the short and purchased a cheap call $4 above entry as a hedge. It didn't disappoint. Well, it disappoint me, but it certainly disappointed the street with another poor earnings report. This looks to be one of the losers for 2018 and even with the volume spike attempt last couple of days, while a short term small move upwards might occur it has all the markings of failing below the psychological 100 mark. If that happens then it will trend to $75 fairly quickly. Even a cheap $80 Put out to June could score a nice ROI for small risk.