9 Scariest Mistakes to Avoid in WSDT
Best day trading practices Oct 31, 2019
In WSDT I, most competitors made common mistakes which cost them their position and chances of winning the competition.
In this article, we will talk about 9 scariest mistakes that you can make and how to avoid them.
1. Over Trading /Anxiety Trading
The WSDT has a loss limit to the paper account given (which we will discuss later). Sometimes, when day traders lose on a large position sizes or when they are in their red days, it may seem that everything is going against them.
When the palms are sweaty and the heart is beating faster, traders are prone to making trades driven by their emotions.
Naturally, everyone would like to recover quickly from a major loss, right? And that is where the temptation comes in.
Traders at this point try to force their trades even when there is a lack of good pointers to make up for the loss.
Traders blow their accounts at this point because their minds become clouded and usually go against the direction that the charts or indicators are pointing to.
Experienced traders advice that, the impulsive moment is the period to re strategize and take it slow. No matter the trading storm always stick to your strategy, it is your sure anchor (Read more on our article: The right mental and emotional psychology)
2. Rigid Strategy
Market trends are the fundamentals of most day trading strategies. Every trade you would make in one way or the other would be affected or connected to trends.
News births trends in day trading. If the US announces a spike in employment rate, you would expect that many people would go in for some stocks or make trades that are in connection with this announcement or news. This is how news and trends are connected.
“Earning seasons appear 4 times a year and the WSDT competition took place outside of that period. For that reason, the opportunities we had were less than usual…depending on what the market gave us. We know exactly what we want to see before we enter a trade, so we just wait for the market to come to us”.
Not adjusting your trading style to moving trends is a grave mistake most traders made in WSDT I.
In as much as there is a section of traders who trade against a trend, it is prudent to always adapt and adjust your day trading strategies to the current market trends which has a connection with the news.
Market trends are like waves, you just need to wait for the right one and get on it with your surfing board which in this case is your day trading strategy.
Stelios (the team leader of the best team, number 1) spoke about how he adapted to the market trends with varying day trading strategies and ideas.
It’s the same way, you cannot wear a T-shirt in winter and can not try wearing a heavy winter jacket under the scorching summer sun.
That is how day trading goes, your strategies must be malleable.
3. Large Trade Sizes
Making trades of large position sizes can be very detrimental to day traders in WSDT. In as much, it has a lower probability of working for many people, it caused the downfall of many traders in the competition.
The trading account for the competition has a loss limit as I said earlier on and most participants were disqualified from the competition because they blew their account.
Many of them blew their accounts due to large trading sizes.
One of the underlying advice given by most mentors of the competition was to avoid taking large trade sizes. You must carefully calculate the risks and know which trade size you want to make.
4. Picking The Wrong Stock
The type of stock you trade is a great determiner in WSDT. Most competitors had an upper hand in the competition because of certain stocks they picked. Eg. Roku was a big hit for many day traders in WSDT I.
So, this boils down to the question, how do you choose the right stock?
It is apparent that the right stock is the one that is selling or moving fast.
It is not necessarily what is trending but other factors such as volatility, liquidity, multiplier, and indicators come into play.
5. Lack of Team Play
“People were still calling trade ideas and setups all day during the competition, helping each other, especially the more experienced traders”
Most WSDT competitors benefited immensely from the coaching of the mentors. Others might have been able to make headway without active team playing, but many fell on the axe because they didn’t have thorough guidance.
Following or shadowing a team leader or a mentor in WSDT increases your success rate because mentors put up their pre-market lists, solid watch list and indicators, as well as the live chat rooms, which gives you a good push in the competition.
It is better to follow strategies that have been tried and tested before deducing your own. This will save you from the consequences of ‘trial and error’ in this competition.
What’s more? Playing a part of a team gives you the chance to interact, ask and draw from various strategies that will fit into a broad terrain of day trading in this competition.
6. Lack Of Balance
Some competitors traded their live accounts while in the competition because of various reasons, primarily because they needed to pay their bills.
This path is however not for the faint because it requires intense concentration and some form of discipline.
This lack of balance is what made many to fall out of the competition. There would be no strings holding you back from trading your live account while in the competition but you must consider the extra weight it will put on your shoulders.
Stay focused and win.
7. Wrong Trading Hours
This is one of the basic concepts of day trading. All-day traders must keep this at the back of their minds. Trading time is very crucial in day trading and as far as the WSDT is concerned.
Most traders find it more profitable to start their trades during the first hours when the market opens. Others also make their trades, at least, the last 1-2 hours before the market closes.
This choice of trading hours has various reasons attached to it. Many experts have it that, those specific trading hours go with specific types of strategies and trends.
This is widely true since it benefited most of the participants in WSDT.
8. No Trading Plan
A plan must always go with a strategy. In fact, the core part of the strategy is the plan it will fit in.
Most traders usually draw out a scheme and that is what made them successful in the WSDT.
The ones that failed were largely due to lack of proper planning, even though some of them had good strategies, how and when to implement them was the main struggle.
It is like firing your weapon without a target. It will lack power and sharpness. The lack of a proper blueprint on trades gave many traders away, and it drew a big stain of inconsistencies and inefficiency.
9. Lack Of Practice
“Nothing comes easy in this life.. And especially in trading. You need to put in the hours to become successful as a trader.”
Definitely perfection comes with practice. Many mentors in WSDT reported that some competitors did not take the competition seriously, owing to their failures.
The lack of practice showed up in their trading and it was evident that they wouldn’t last before their next breathe, and the prophecy came to pass.
The main differentiator is practice, that is what draws the strata between a potential winner and a loser.
You eventually become good at something you do over and over again. The WSDT gives you that opportunity to keep trying till you become a better day trader.
Now you have illumination on your path in WSDT, take advantage of the lessons learned from the mistakes that made many to fall in this competition and let it be a springboard to your success.
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