Patience
Patience is yet another important virtue. Day traders must be willing and able to
tolerate a series of losses, as they patiently await a turn in their fortune.
However, too much patience is not a virtue for the day trader. Too much
patience can be a fatal flaw. The day trader who is too patient in hanging on to a losing position will
be violating one of the cardinal rules of sucВэcessful day trading, which is, of
course, not to carry losing positions (or for that matter any positions)
overnight. Losses must, in all cases, be taken as quickly and as expeditiously
as possible. The idea is, of course, to ride profits to their maximum while
eliminating losses quickly and at the smallest dollar amount.
Self-Control
Another important quality which successful day traders must either
possess or develop is self-control. During any given day, literally hunВэdreds
of day-trading opportunities will present themselves. Whereas many of these may
turn out to be profitable opportunities, the day tradВэer does not know in
advance which will or will not produce the desired results. The vast majority
of opportunities are specious.
Furthermore, the day trader is limited in how many of these opportuВэnities
may be taken. It behooves the day trader, therefore, to begin each day's
trading with a general plan of action within which the day's events may be
interpreted and the proper actions taken. The plan, howВэever, must not be so
restrictive as to blind the trader to other unexpected opportunities. In so
doing, some of the worthless or losing opportuniВэties will be eliminated ahead
of time, and the trader will stay focused on those which seem to offer the best
potential.
Hopefully, the information contained in this book will be valuable to
you in making these decisions. I liken the job of the day trader to that of a
hunter. The day trader and the hunter are both provided with a finite amount of
ammunition. For the hunter, the ammunition consists of bullets, arrows, or
weapons. The day trader's ammunition is capital. Trading capital and ammunition
may both be easily squandered in purВэsuit of worthless targets, and the trader
and hunter who engage in this type of useless activity will eventually find
themselves without the ammunition to pursue larger, more profitable game. The
day trader must be patient, methodically awaiting only the more promising
opportunities upon which to take aim and fire. And then, when the opportunity
presents itself, the trader must follow through according to plan.
Category: Day trader
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