We all know that we can watch some trading instructional videos on YouTube, there are many videos that teach you how to “make big money” in the stock, futures, or foreign exchange markets. But today Anbbit will guide you to see there is a video posted by day trader Matthew Jay that tells you how you lost money.
Matthew Jay is a real estate agent and an amateur trader. In recent years, he has been engaged in day trading. He has made thousands of dollars in stock trading but has also lost most of the trading funds.
At present, he warned other day traders in a video that,
“when thousands of families are staying at home to avoid the epidemic, causing millions of people to buy or sell stocks for the first time, Intraday trading has also become very dangerous.”
Since March last year, during the entire period of the new crown epidemic, intraday trading has become very popular in countries and regions such as the United States and Europe and is especially popular among young people who have never invested in the stock market in most cases.
Matthew Jay said in his online video,
“This left my entire account ‘damaged’. Day trading reduced my trading account funds from 50,000 and then to $40,000. I almost lost everything.”
Professional day traders spend several hours a day in front of computer screens, observing and studying trading charts, and through various trading strategies, trying to profit from asset price fluctuations. They may carry out dozens or even hundreds of transactions every day, and all liquidate their positions before the market closes.
The coronavirus lockdown has given young traders more time to trade on online brokerages. Millions of Americans who are still unemployed may think this is to make up for lost income.
Brett Steenbarger, a top trader mentor on Wall Street, an expert in trading psychology, and a current professor at SUNY Northern State Medical University in Syracuse, New York, said,
“Not all traders are intraday trading, but since the new crown epidemic and the city blockade, intraday trading The number of participants has definitely increased substantially.”
Research shows that most short-term traders lose money. Steenbarger said,
“On average, day traders perform very poorly, and the percentage of traders who are ultimately profitable is only a few single digits.”
For Matthew Jay, he understands this very well and he is now warning other traders. More than a decade ago, Matthew started trading stocks while studying business at a university in Ontario.
In the first 6 years, he did a very good job, making more than 150,000 US dollars in accounts of several thousand dollars. However, he was impatient with the slow returns of existing transactions and decided to try intraday trading.
“I like taking risks very much. I just want to know that I have a potential opportunity. Even if I fail in the end, I still think that there is a big chance to succeed.”
Matthew quickly became disliked “closed and lonely” intraday trading, spending several hours a day “binding” himself in front of the computer, and then often communicated with other intraday traders online. Unfortunately, he found himself out of control in frequent transactions and suffered huge losses as a result.
“Therefore, I will try to jump to another stock and try to make money from it, and then I will snowball into this loss and another loss. Moreover, I find that whenever the price reaches a new high, I will happy for a day or two, but then I will be frustrated because the price has not reached the next level. It is true, this is a battle that can never be satisfied.”
Several times, Matthew tried to give up withdrawing from the transaction, but then all went back.
Many experts warned that intraday trading could be bad-well-known investors including Kevin O’Leary, chairman of the O’Shares ETF and co-host of the famous show “Shark Tan”, have compared intraday trading with gambling.
“Intraday trading is not an investment, it is a gambling. There is nothing wrong with this, and there is nothing wrong with Las Vegas. But it is not an investment,”
All in all, “I don’t have any opinion on intraday trading, but for me, you can go to Las Vegas or you can do intraday trading. It’s the same thing. That’s not investment, that’s gambling.”
Keith Whyte, executive director of the National Council on Problem Gambling, said
“For many people, intraday trading is very addictive, which is a bit like casino gambling. When a transaction is followed by a continuous transaction, the same hypnotic effect’ is produced as if people sitting in front of a slot machine.”
He said that maybe someone can make money in intraday trading, but this is not for me.
How to avoid common mistakes in intraday trading on the market?
The skills of intraday trading are not easy to master, especially in the market. It should be said that short-term trading operations are more complicated than long-term trading. Many rules that apply to long-term trading also apply to intraday trading, technical price levels are equally useful, and chart pattern analysis methods are the same.
However, day traders need to make trading decisions within a short period of time, and there is no time for repeated consideration. Decisions are also more affected by emotions.
To do a good job of intraday trading, you must have your own set of principles and not be affected by your emotions or other factors:
Has a trading plan-A good trading plan needs to include the strategies used by yourself, entry and exit points, entry conditions, how to manage losses, and exit the market as long as you make a profit. The trading plan should be written on paper, put it where you can see it, and use it to remind yourself when the trading performance is poor.
-Establish an effective trading strategy — — Strategy is also part of the trading plan. It is necessary to describe how to analyze the market to find trading opportunities. The strategy should describe when to enter the market and where to set stop loss and take profit.
Follow risk management-The risk management strategy should define the maximum amount of loss you are willing to bear in a single transaction, the risk-reward ratio, etc.
Make transaction log-The transaction log can intuitively help improve transaction performance. The log should record your entry, tools used, entry and exit prices, date, trading time, and the selection of this transaction the reason.
Understand the economic calendar-news reports, headlines, employment data, interest rates, etc. will all have an impact on the market. If your trading is not based on fundamentals, then try to avoid trading during important news releases.
Day traders can also consider starting with long-term trading styles, such as swing trading, to get enough time to analyze the market and learn to make wise trading decisions. At the stage where you fully understand the market’s operating mode and gain a certain amount of experience, start to shorten the trading cycle and try intraday trading.
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