Day Trading is not a full time activity.
Most unsuccessful day traders don’t understand this until they incur significant losses. This is not a profession where you work from 9:30 am to 4 pm (Eastern time in the United States when stocks trade during regular hours). The desire to be in the market during all trading hours can hurt more than help with making profits.
The 1% day trader knows that there are countless day trading opportunities in the stock market through the regular session. 95% of day trading is waiting. Waiting for the right opportunity and the ability to do nothing for long stretches of time- even hours and days. This mindset is the opposite of a typical job where action is equated to productivity that leads to income. The regular stock trading hours in the US gives you 6.5 hours to trade. This does not mean you have to be present at your desk, looking at charts and following stocks and news for the whole 6.5 hours. The 1% day trader knows this and has overcome the compulsive tendency to be in the market during the whole time the stock market is open.
Most day traders will acknowledge days when they traded at the market open, lost $1000 by 10 am and then at 2 pm, found another opportunity to day trade and made $2000 in profits, ending the day with $1,000 in gains. “If I had avoided the morning trade, my gains today would have been $2,000 instead of $1,000”. This works in reverse too. A trader could be up $3,000 by 11 am and instead of moving to another activity and taking the gains home, be compelled to stick around for more gains, only to lose it all by 4 pm and end the day.
1% day trader Mind set
You must avoid watching stocks all the time. Do not conflate day trading with a conventional job.
If I have made satisfactory gains for the day, can I stop trading but keep watching stocks?
If you have no intention to get in a trade and are happy with the gains, do not allow your brain to get saturated by looking at stocks. Close the chart. Close the trading platform and do something else.
Common mistake made by 99% traders.
I have made $500 in profits for the day. I am happy and content and won’t trade for the rest of the day
I have nothing else to do so let me keep the charts open and only watch stocks. I won’t get in a trade.
It’s 3:30 pm ET. 30 minutes before the market closes. A seemingly compelling trading opportunity is seen. The ‘this time it’s different’ bias comes into play and you get into a trade, going against your own promise to yourself.
By 4 pm ET, only have you lost the 500 you made, but lost more on the late trade and end the day with a $800 loss.
Of course the 2nd trade could work in your favor but the mental discipline is to have the conviction to take your profits home and stick to it!
I would rather lose trading opportunities than lose money trading.
