I’ve seen it all too often. A new trader believes the hype and rushes into trading stocks before he/she is ready. Unprepared, they open an account and begin buying stocks. They make a few gains and think “this is easy”. And then the day finally arrives. A stock they chose starts to tank. Almost as soon as they buy it, the price begins to fall. And then it falls some more. And the trader nervously goes through 100 different thoughts, trying to decide what to do. “Do I get out now and take the loss before it gets any worse?” “Should I ‘be strong’ and wait it out?”

Then the self-talk begins to go downhill. “I’m so stupid – why did I let it go this far?” Or the mind begins to rationalize. “Well, I’ll just hold it over one more day and see if it gets better before I sell it.”

Sound familiar? If you’ve executed more than a few trades, then I’m sure it does.

Here’s the thing. Every trader experiences this. Every trader has day trading losses. Every trader has to figure out how to get a handle on it. In fact, until you get a handle on your losing trades, you will never make it as a day trader. I hate to be so brutal. But it’s the truth. You can glory all you want in the occasional brilliant trade. But, if your day trading losses are wiping out those brilliant gains, then you won’t be playing the game much longer.

So, what can you do about it?

Here are some basics to get you started. This advice is tried and true. If you’re just starting to day trade, then you’d be wise to follow it.

1. Keep a journal. Record every trade, your profit/loss, what you did right/wrong, what you saw/didn’t see. If possible, print a chart of every trade to go along with that journal. Then review that journal every day and every weekend.

2. Find a solid strategy. Making money as a day trader has to do with discipline. Discipline is based upon doing the thing you’re supposed to do whether you feel like doing it or not. And you cannot have discipline until you have a strategy that tells you what you’re supposed to be doing and when you’re supposed to do it. These strategies don’t come quickly. They have to be tested in real world trading and they require you to keep honest records of each trade.

3. Don’t go it alone. It’s easy for the new day trader to sit in front of the computer, all alone, and feel removed from others. It’s dangerous actually. So, find a group of traders, a chat room, or some place to help you interact with other traders. And don’t think you know everything just because you’ve been trading a few months. Becoming a profitable day trader takes time. But whoever said you could earn a surgeon’s salary with an elementary school education?

You can learn to get a handle on your day trading losses. Following the three steps I just mentioned will get you started in the right direction.

Bob Joiner is a day trader, coach, and author. His web site, http://www.start-day-trading.com was built to help new traders learn the basics of day trading. You’ll find other articles on day trading strategy and day trading losses at his site. A “trade review form” is available when you sign up for the ezine.

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