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Fatal Day Trading Mistake #4 -Trading The Wrong Market

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If you know the pitfalls of trad?ing, you can easily avoid them. Smallmistakes are inevitable, such as entering the wrong stock symbol or incorrectlysetting a buy level. But these are forgivable, and, with luck, even profitable.What you have to avoid, however, are the mistakes due to bad judgment ratherthan simple errors. These are the ?deadly? mistakes which ruin entire tradingcareers instead of just one or two trades. To avoid these pitfalls, you have towatch yourself closely and stay diligent.

Think of trading mistakes like driving a car on icy roads: if you knowthat driving on ice is dangerous, you can avoid traveling in a sleet storm. Butif you don't know about the dangers of ice, you might drive as if there were nothreat, only realizing your mistake once you're already off the road.

Too many traders are fixed on only one market. They may trade only the forex USD/EUR, or the E-miniRussell, or the E-mini DOW, or just cer?tain stocks, etc. While they may feel acertain sense of expertise or mastery over this one market, no one, no matterhow experienced they are, can predict what will happen all the time. Thesepeople are setting themselves up for catastrophe, because there will inevitablycome a time when they'll make a mistake. And, with no diversity in theirtrades, they will lose everything they've worked so hard to gain.

The key to choosing a market isn't to look for one you seem tounderstand better than the others. That will always be something of anillusion. But there is one market you can always depend on: the one that is moving. You know you should buy when themarket goes up and sell when the market goes down. A moving market will alwaysbe profitable, even if you've never traded a single share there before.

Pay close attention to trendlines, both in the markets where you?realready trading and the markets you're considering. If one of your markets isconsistently choppy or just moving sideways, get out of it and move on toanother. If you think of successful trading as sticking not with a market butwith a trend, no matter which market it's in, then you're thinkingsuccessfully.

The key, of course, is that you have to keep an eye on markets whereyou aren't currently trading. Keeping up with your options is just as importantas watching what you're familiar with. This is where research and experiencecome into play. Getting to know a number of markets (and how to find out aboutthem) takes time. But don't let that discourage you. Also, don't feel like youhave to understand every option at the very beginning. Pick a few differentmarkets to actually trade in, but also choose a few just to watch. That way,you'll see how your own trades work, and you can also compare that activity tomarkets you may not know much about (yet).

The only way to learn about which markets are right and wrong for youis to watch them. Watching a variety of markets will give you the knowledgeyou'll need to use when it's time to change gears and find that elusive movingtrend.

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Markus has sinced written about articles on various topics from Day Trading, Fat Loss and Day Trading. Markus Heitkoetter is the author of the internation bestseller Day trading and a professional . For more free information on day trading visit his w. Markus's top article . to your Favourites.

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