Trading/investing is a world that relatively few enter into as individuals. Most folks simply trust others to make their money work, and that is fine, as many competent and even good money managers exist out there. You just have to find them, and sometimes that means doing your work. Yet there are those individuals that, for whatever reasons, want to manage their own money. Some are good at it because they found their niche, their trading spot, a flow that carries them forward. Then there are others. Like fish flopping on dry ground, these folks try desperately to find the flow, the easy water that will carry them forward …
Well I am trader, and the question I wanna ask is, why is it so difficult to make money trading intraday in stocks? In spite of getting calls right, I am not able to generate money. Is there an issue with risk management? But if I don’t earn money, I also don’t lose – net no profit, no loss. I really get frustrated … Is there anyway you can help me out?
Yes, I can help you out – stop trying to make it as an intraday trader. It sounds to me as if you are hurting yourself with frustration. Take it from me, one who does not handle frustration well, the last thing you want in your life on a daily basis is frustration. Remember, trade in the day, invest in your life. You are not investing in your life. You need to stop now, before it is too late, and your “net even” status changes to “net loss” because you start rushing, start trying too hard, start making bad decisions.
So, why are you stuck on intraday trading anyway? That world is full of high-energy, Pepto Bismol guzzlers that thrive on adrenaline, the rush of the trade. Okay, so I am stereotyping here, but I may not be far from a truth – intraday trading is difficult and taxing work. I know, I have tried it, and it did not take me long to stop. In fact, my attempt at intraday trading is the origin of my tag line, the one found at the end of this article. It simply is too much work when a similar return on investment can be had trading other ways.
Try swing trading, or position trading, or guerilla trading, or long-term investing. Try anything but intraday trading, unless you want to live in a world of frustration, which would not be my first choice, and since you asked me this question, I have a right and an obligation to tell you the truth. Now onto another reader’s question …
Do you use stops and if so, how do you determine where to set them and do use trailing stops (determined by what)?
Yes, I use stops. Any experienced traders will tell you they also use stops. Stops are invaluable for protecting you when your trade goes in the opposite direction. In fact, I have written that one should never enter a trade without a stop in place. Stops are that important.
I like trailing stops because they allow for flexibility when a trade is moving your way, and you think it will move past your profit point. It is a way to limit loss of profit as the trade moves. I like to adjust the stop, making it tighter and tighter as the trade moves in the right direction. The determination is somewhat arbitrary, as once I am in profit, I look to the price action, strength, and other factors to determine how wide or how tight to place the trailing stop. Good question and smart thinking on your part. Keep asking and learning …
Trade in the day – Invest in your life …
