When new people enter the trading arena. They sometimes do not realize how important is to follow THE RULES! Just as in “LIFE”, Rules in “TRADING” are just as important, if not more important. We put our risk capital to “work” to profit every day. We absolutely must have rules to live by to successful traders. Following rules creates discipline and it follows that trading with a set of rules and discipline, over time, creates SKILL.

In life, we need rules to maintain order and discipline. If we speed, and get caught, we get busted and are issued a citation for not following the rules. To our own safety.

A skillful day trader can make a lot of money and not unlike an unskilled trader, the skillful one can also LOSE money. Yes, surprise! We don not win every trade! In some form or fashion, ALL traders experience draw-downs. Draw-downs are simply a stage when you find yourself down money in your trading account. Back in 2008 millions of investors lost literally tens of millions of dollars! That was a draw-down. Those that “hung in there” recovered a lot, as the market is about right back where it was back in 2008!

Draw-downs happen whether you are an investor or a trader and there most definitely is there a noticeable difference between a trader and investor. An investor is someone who puts HIS/HER money to work, long term in hopes of gains later as time goes on. A trader is looking for profits to withdraw every week, month, or quarter AND to live off of them! The investor normally has a “day job” or has some type of monthly income covering his month to month expenses whereas traders use their trading accounts to cover their monthly expenses.

And, as day traders you are breaking it down just one more level: Day traders trade for daily income. Day trading IS the “day job”.

Regardless of your trading “status”: Investor, Trader, Day Trader. You will get draw-downs. The difference is that an investor may not see the draw-downs for several months, or sometimes years! Where traders and day traders may realize losses every day!

One reason I discuss discipline and rules so much is because it is among the MAIN reasons people LOSE money, or better said, the key reason why people fail to recover. We ALL lose money as we discussed. A day trader must have a solid set of rules to follow. A skilled trader, following rules will brush it off, trade EMOTIONLESS and forge ahead to recover his losses and ultimately make money. And this will continue like a cycle. Traders will win, lose, recover, win, lose, recover, etc etc. It never ends!

Because of this , day trading online for income is can be so difficult. If you let it, you will ride an emotional roller-coaster! For those investors out there: if you call your fund manager every day you see the DOW down 100 points he could tell you: Glance at the big picture and do not look at day-to-day numbers. You will drive yourself nuts! You pay a fund manager to decide what investments to make, stocks to buy, etc. He too will have draw downs. A good fund manager, over time, will make you money.

Becoming a day trader, a successful daytrader, you must:

1. Cultivate the confidence to trade without emotion

2. Trade with a set of rules!

3. To diligently follow those rules through the “thick and thin” and This may not be always easy. It takes many practice. Sometimes years of practice. You must know exactly whom you are, what you should do and when. You will get to a point when emotions get tough. During these moments you need to Know what to do and to have the confidence to do whatever it is for you to do. Essentially, the only true challenge is handling the power of your mental state. Master your emotions.

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