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3 Day Trading Secrets You Must Know – Online Traders Tips

Here are 3 Day traders tips for beginners you must try before investing!

Trading can be a frustrating art.

Few, if any, ever earn enough to make it a full time job.

Which leads one to ponder the question…

Can I really be a successful trader?

And according to the efficient market hypothesis the answer isn’t motivating…

It’s no.

But lucky for you…

The efficient market hypothesis is blatantly untrue.

And if you don’t know what the efficient market hypothesis is don’t worry, let me explain.

The efficient market hypothesis is a theory that proclaims all share prices in the market currently reflect the correct, or efficient, price with all information and sentiment already baked into the price. OR in regular people speak; every share price in the market at this moment in time is accurately valued and if it were not, market participants would rapidly seize the opportunity to either buy or sell resulting in a sharp increase or decrease in the share price back to equilibrium.

Even that got a little wordy didn’t it?

Well, what it means, and I’ll try to get even more granular here, is that YOU (a day trader or any investor) cannot find deals in the market because all shares are selling at fair market value. Meaning, there ain’t no deals in the market so don’t even try buddy.

The efficient market hypothesis tells you the markets can’t be beat because everyone already has the same information.

But this is just blatantly false. Untrue. Inaccurate. Wrong. BS.

Why?

Because thousands of traders are capitalizing on the markets and making money every-single-day.

And they do so because they have an edge…which means they know something others do not.

Enter stage right: Mr. Paul Tudor Jones.

You may have heard of him. Mr. Jones is one of the most successful traders to grace the earth.

In the book Market Wizards, by Jack Schwager, he sits down with Mr. Schwager for an interview and talks about his career as a trader.

He also talks about 3 important principles that every trader should have on their radar.

Let’s get into it.

Day Trading for Beginners

I know.

Cliche advice.

But amid your bout of “trade-rage” i’d imagine you throw this rule right out the window along with your desk chair.

But Mr. Jones says it a bit more eloquently…

“Don’t avenge your loses”

If you’re a trader you understand when I say….you’re gonna have loses. It’s inevitable.

But the only way to mitigate your losses is by playing it cool. Almost every legendary trader has one thing in common….

They remain detached, unemotional and rarely make decisions spontaneously.

Don’t commit the trifecta of “fast-tracking-your-way-to-the-poorhouse.”

To be a little more specific…Mr. Jones means not trying to avenge losses by jumping right back in after a heavy loss. More often than not, the knee-jerk reaction to recover what you lost comes from a faulty place. It’s an emotional decision, not thought through with reason, and will only make you worse off than you were before.

But I understand how difficult this can be for new traders. The blood lust to recover what you’ve been robbed of can easily overpower any rational thought or logic.

Just remember…

Once you’re out…you’re out…

Each new trade is a fresh slate…

Don’t be fooled into charging back into a losing situation.

Which leads us to secret #2…

10 Day Trading Strategies for Beginners

Day Trading Education for Beginners

As a trader, you need to let your trades run to maximize your earnings. Selling too soon can leave a lot of money on the table.

Mr. Jones understands this…but he also understands the best times to do this are when you’re making good decisions.

He also emphasizes risk management. And understands getting out or lowering your volume when your trades are producing poor results.

Follow the trend…your trend.

Because at the end of the day…only you are in control of your trading….

I’m sure you’ve made some unwise decisions in your life.

I know I have.

But if you really think about it…

Poor decisions are a result of one thing.

Not having substantial control over the situation.

You may buy a defective car…but chances are you didn’t do your homework.

Crappy spouse?

Did you give it long enough to get to know them?

Bought an overpriced TV?

Did you do enough shopping?

The same goes with trading.

Are you entering a position because you’ve done your research and have an explanation for why you’re getting in?

Or are there some unknowns in your plan that you haven’t cared to unveil?

Mr. Jone’s puts it this way:

“Never trade in situations where you don’t have control”

He specifically mentions entering a position prior to key reports as a no-no.

When you enter a position make sure you cover your ass. The last thing you want is some unexpected news to clean you out.

And having control of your trading positions means accounting for all possible circumstances. Run the scenarios, have a theory, and carry out your plan.

If you lose money because something didn’t go your way, but you understood the likelihood of it happening…that’s ok.

But the last thing you want is to be blindsided by an event that you didn’t account for…or have control of.

Putting it all together

Mr. Jones has made an incredible career from trading and in the book, Market Wizards, he boils his techniques down to 3 principles…or secrets if you will.

  1. Don’t avenge your losses
  2. “Decrease your trading volume when you are trading poorly, increase your volume when you are trading well”
  3. “Never trade in situations where you don’t have control”

Whether you’re new to trading or a seasoned vet, I believe the above principles still apply.

These are tried and true trading principles that won’t change. A new trend following system or chart pattern will likely arise but at the end of the day if you violate any of the above, nothing can save you.

On a last note, if you’re a trader and haven’t read Market Wizards by Jack Schwager I highly recommend you go do so.

Jack interviews dozens of highly intelligent, and highly successful traders to discover what makes them tick.

It’s a must read for any aspiring trader or current trader.

Happy trading.