No matter how much you practice or how in tune you are with the market, no matter how good your trading skills, and no matter how skilled you are with setting stops, bad things can happen. Everyone goes into the market hoping to make more money than they went in with, yet sometimes you come out of the market with a lot less. Yet, as a day trader, you have to accept that this is the risk you are taking and that loss can and does happen.
But how do you cope with it when it does, and what can you do with this experience? First of all, you have to get over it and move forward – it already happened and this is part of being a day trader. It is of course painful to see your hard earned dollars disappear into the hands of other traders and that someone else gained on your loss. But all you can do is close out of your position and realize tomorrow is a new day and that you might be on the other side of that winning trade next time.
It can also be helpful to do something positive or proactive to clear your head and your frustrations so that you can start fresh again the next time. Also, take the time to review what happened because sometimes a loss can have positive consequences; it can teach you valuable lessons that make you a better, smarter, and more experienced trader going forward.
Here are some tips on maintaining discipline and focus in trading:
1. Keep a whiteboard to remind yourself to stay focused and maintain composure if the trade moves against you.
2. Wake up on time and get to your PC early.
3. Show up every day to trade, either in your real DAS account or your DAS simulator.
4. Make sure you are prepared before the market opens – the earlier you start your morning the more time you will have to go through the news and find the best stocks in play.
5. Set up a Stop Market Order in DAS to ensure your order is filled.
6. Consider the different ways the stocks you have picked might trade and develop a series of “if…then” scenarios.
7. Take a break from looking at the market (nap or exercise).
8. Make it your goal to develop better trading skills, not just make money – you have to focus on getting better every single day, trade by trade.
9. Learn as much as you can, but keep a degree of healthy skepticism about everything. I.e., ask lots of questions, but don’t always accept experts at their word.
10. Have patience and self-control. Wait for opportunities with which you feel comfortable and confident.
11. Engage in meditation techniques or any relaxing activities to take your mind off the stress of trading and truly unwind.
12. Leave your day trading behind at the end of the day – enjoy your personal life separate from your day trading life.