Post feedA Daytraders Dream, A Trend Traders NIGHTMARE!
Does anyone out there happen to be a daytrader?
Not me. I could never hack it as a daytrader. If you have not already, outline your strengths and weaknesses. Not just as a trader, but as a person as well. This will really help you understand what type of a trader you should be. Years ago when I was trying to define how I should trade, I went through a similar exercise. I found out I was an agressive personality, impatient, liked to see results quickly, and thrived off variety. So I defined myself as a short term (as short as a couple days to as long as a couple weeks) aggressive trader. Aggressive, meaning I prefer to swing for the fences with my option trades. They are usually low probability but high reward trades. This also means I strike out a lot. With a solid money management approach, I am able to balance bigger winners, against many smaller losers.
Where am I going with this? Today's market action was interesting to say the least. I watch the guys around me that daytrade, and see how they are loving the opportunities...then compare them to the longer term traders who are breaking out in a sweat because they are not able to make heads or tails of it.
Are you the person sweating, or the person going hog wild today?
If you watched the market today, you saw a lot of volatility. Intra-day movements like this that are out of the norm, offer great trades for someone scalping points on an index or high priced equities. Looking at the 1 day chart of the S&P, you can see some pretty big swings.
If watching the market move on a day like today causes emotional reactions, stay away! Don't feel compelled to watch the market during the day. We all know that intra-day moves mean very little compared to where a stock closes on the day. However, if you see potential in days like today, or think you have an eye for moves like this, why not practice day trading?
Not me. I could never hack it as a daytrader. If you have not already, outline your strengths and weaknesses. Not just as a trader, but as a person as well. This will really help you understand what type of a trader you should be. Years ago when I was trying to define how I should trade, I went through a similar exercise. I found out I was an agressive personality, impatient, liked to see results quickly, and thrived off variety. So I defined myself as a short term (as short as a couple days to as long as a couple weeks) aggressive trader. Aggressive, meaning I prefer to swing for the fences with my option trades. They are usually low probability but high reward trades. This also means I strike out a lot. With a solid money management approach, I am able to balance bigger winners, against many smaller losers.
Where am I going with this? Today's market action was interesting to say the least. I watch the guys around me that daytrade, and see how they are loving the opportunities...then compare them to the longer term traders who are breaking out in a sweat because they are not able to make heads or tails of it.
Are you the person sweating, or the person going hog wild today?
If you watched the market today, you saw a lot of volatility. Intra-day movements like this that are out of the norm, offer great trades for someone scalping points on an index or high priced equities. Looking at the 1 day chart of the S&P, you can see some pretty big swings.
If watching the market move on a day like today causes emotional reactions, stay away! Don't feel compelled to watch the market during the day. We all know that intra-day moves mean very little compared to where a stock closes on the day. However, if you see potential in days like today, or think you have an eye for moves like this, why not practice day trading?
