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Day Trading Stock Tip: Don't Focus on the Money

When learning to day trade, a very important lesson is learning to manage risk. Day trading is a very risky business and there is a distinct possibility that you will lose much more than you make. To be successful in this venture you need to learn to reduce the risk and this means keeping an eye on your trades and monitoring your trading journal.

You need to be aware of your trades and the results of each trade. There are several ways to do this including by graphing your trades, which give you statistics on each trade, visualizing your trades and reporting your trades in your trading journal.

Day trading stocks is inherently risky, as you are making several trades each day and thus the statistics you get will be noisy. If you are able to visualize your trades then the noise will be cleared and you can clearly see what you are doing. To do this simply draw a box around each stock position and make a graph.

You can visualize your trades by drawing a box around each stock and then moving the mouse over each stock and reporting the results in your trading journal. This will allow you to reduce the risk of making a bad trade and keep a watch on your trades.

If you are unable to monitor your trades then it is very likely that you will open some that were a loss. To minimize the risk in day trading you need to learn to trade in aggregate charts. Aggregate charts are made by aggregating several days of charts into one. This will enable you to see how the stocks you are trading are performing over a longer period of time. This is very important and will allow you to trade more cautiously.

The best way to deal with a loss is to exit the losing stock early. This is true of any other business venture, but in day trading stocks especially, exiting early will allow you to keep the profits and cut the loss. Be realistic when exiting your positions. Some day traders will exit a position too early. This could lead to them keeping the loss and not making much money overall. Exit too early and it could force you to take a loss and the profit that you may have made could turn into a loss.

A Day Trading Success Tip: Don't focus on the money, instead focus on the profit and success.

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