The Qualities That Successful Day Traders Must Possess

Day traders must study the various swings and know where the market and the various stocks stand; day traders must recognize the inherent weakness or strength in prices; understand the basis or logic of movements. Day traders should recognize the turning points of the market; see in his mind's eye what is happening on the floor of the exchange.

Day traders must have the nerve to stand a series of losses; persistence to keep him at the work or trading during adverse periods; self-control to avoid overtrading; an amiable and calm disposition to balance him at all times.

For perfect concentration as a protection from stock tips, gossip and other influences, which are rampant in a broker's office, day traders should, if possible, seclude themselves. A small room with a ticker (ed. note: a computer with real time data), a desk and private telephone connection with his broker's office are all the day traders require. A day traders work requires such delicate balance of the faculties that the slightest influence either way may throw the result against the trader.

You may say: "Nothing influences me," but unconsciously it does affect your judgment to know that another man is bearish at a point where he thinks stocks should be bought. The mere thought, "He may be right," has a deterrent influence upon you and clouds your own judgments; you hesitate and the opportunity is lost. No matter how the market goes from that point, you have missed a beat and your mental machinery is thrown out of gear.

Silence and concentration, therefore, is needed to lubricate the day traders mind.

The advisability of having even a news feed in the room is a subject for discussion. The conclusion is that ‘news’ is ‘news’; the recording of what has already taken place, no more, no less. It announces the cause for the effect that has already been more or less felt in the market. On the other hand the tape tells the present and future of the day traders market.

Money is made in tape reading by anticipating what is coming - not by waiting till it happens and going with the crowd.

The effect of news is an entirely different proposition. Considerable light is thrown on the technical strength or weakness of the market and special stocks by their action in the face of important news. For the moment it seems to us that a news feed might be admitted to the day traders sanctum, provided its whisperings are given only the weight to which they are entitled.

To evolve a practical methodology - one which day traders may use in their daily operations and which those with varying proficiency in the art of tape reading will find of value and assistance - such is the task we have set before us in this manual.