When we first begin day trading online, we start with a basic goal and a little understanding, some education, and a small account so that we are limiting our losses. This is smart and generally the way everyone starts out. However, when a string of strong trading days lands in your lap and you find a little success, it can easily give you a self delusional permission slip to go ahead and take unnecessary and even fatal risks. The market can surprise you one day and wipe you out the next. However, while youre developing your confidence, you cant overestimate the threat that follows a good week.



Many traders who have been on the scene for a few months experience a sudden and unexpected development in their favor. We usually call this a windfall. A gambling mindset takes over and suddenly you are convinced that you are no longer playing with your own money. While to some level of understanding, this can be accurate, why give away money that becomes yours? If you truly believe you are playing on money that isnt necessary then why not pull back a little, safeguard your earnings, and continue to bring in money rather than toss is all back. If you had to feed your family on fish alone, would you throw back the extras just because you had a good day?

Dont get greedy. It is the number one rule of successful success. Take your windfalls and earnings as a sign that you are developing confidence, learning to play the game, and are experiencing some of the finer points of day trading. But dont toss it away because you believe you are now becoming invincible. Nobody is invincible in the market. The market makes sure of that.

Many novice traders get into the market with the idea that they can play with the big kids and they hit the ground running, cautiously, and they stick to their plan like a pro. Then they get lucky or played smart and suddenly they are staring at a new set of parameters because they did better than they expected.

This should be a confidence booster, not an arrogance creator. Almost all novice traders will immediately start taking bigger risks with larger sums of money, risks they never would have ever considered before. Thus, it is inevitable that they lose their earnings quickly. Some learn their lesson, some quit trading altogether, and some repeat the mistake a few more times before choosing option number one or two.

All traders with ample experience learn to understand their confidence level and how it is affected by good trading days. They also learn how to micro manage their own will to take chances during those periods. That is what keeps them successful. Novice day traders need to learn that confidence is a necessity.

Arrogance will leave their account empty. You can not beat the market. You have to flow with the market, deal with the market, live in the market, and live with the market. But there isnt anything to beat. You either gain from the market or you lose. Deciding to take unnecessary risks because you have brought down the house, so to speak, is not smart investing. It is gambling.

Some seasoned traders have opted for a concrete percentage plan. This means that during time of peak performance, they have a limited percentage that they allow themselves to reinvest in the market, and the rest gets shuffled directly away elsewhere. Yes, there are times that pass them where they could have hit it a little bigger. During those times it is easier to forget about the inevitable loss that will occur provided you are in the market.

When you do well, celebrate you and your success but stick to your guns and dont let arrogant trading turn your bank account around. You have the potential to determine how to handle success without losing it right away. All you have to do is become increasingly self aware, create a plan for tolerance, and stick to it, no matter what.