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For those day traders looking to be more active in the stock markets, active stock trading can be quite tricky. There is a high learning curve associated with getting adept, and even then it most likely is not for everyone. An extreme learning curve usually means losing capital. One has to understand what not to do before you can see what you should do. The greatest educator of that is cash. There are 2 methods that a lot of people learn this - actually getting their feet wet with day trading, and through the use of a computer program like a day trading robot.
Sorry to say for most, when they see they lose some money at stock trading, rather than understand the right lessons about why they did not win, instead they change the perceived "cause" of losing. This is notably bad if a stock trade is exited only to see it reverse back in the direction the trader was betting on. So they end up stating "I won't let this happen to me again", and usually ignore stop losses. This is based on the incorrect thinking that because the market changed direction once when you stopped out (or many times) that this will always be the case. Your brain has an odd way of only focusing on "lost" pleasure. Pleasure here is winning some capital from the futures markets. It totally ignores the stop where the price then dropped another 5 or 10 percent more. This is because the stop price was "proper" and that actually fulfills the brains need for pleasure, although the stock trader still lost capital. So what ends up happening is the brain is targeted on avoidance of detrimental results, or being incorrect.
This type of thinking is extremely hard for most to defeat, and is probably one of the leading factors most do not make it as a day trader. You have to learn that losing is part of the exercise, and since the game is pretty much an odds bet (price will move X in my favor before moving Y against me), you need to just repeat the bet over time. While this might be an oversimplification, the reality is you have to literally dismiss the losses if you adhered to the rules. Another reason is usually undercapitalization and lack of understanding of the futures markets movements.
One of the many ways some discover to overcome limitations is through the use of a day trading robot. This is computer software which is created to make trades in the stock, futures or forex markets and generate buy and sell signals. Notably when someone is just starting with trading, this type of software can be invaluable to help with discipline. A computer will exit a trade because the protocols say so, there is no thinking or judgement involved. Of course one should be very aware of the quality of the day trading robot, as most really are not very good. I usually suggest anyone who wants to use one to only do so on a fake account (not real cash). As with any tool, there are inherent limits as to what they are able to accomplish and the types of market action they work best in. The real key element is to use the day trading robot to know discipline, and perhaps understand some decent chart pattern setups for stock trading.
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