Saturday, March 17, 2007

Overcoming daytrader stereotypes

Earlier this week, The Wall Street Journal talked about the types of people who showed the most success as daytraders since 2000. While it's probably one person's independent assessment, here is what the article concluded:

The best daytraders were those who are: airline pilots, graphic artists, and heart-lung machine operators. "These occupations are trained to make quick decisions based on visually presented information or instrument readings without spending time questioning the indicators."

The worst daytraders were those who went through conventional college backgrounds such as: engineers, doctors, lawyers, dentists, economists (this means you Bernake) , computer programmers, accountants (this means almost anyone with the letters C.P.A. after their name), and entrepreneurs (I'll disagree with this last one, I know many who excel as daytraders). The two common characteristics of the worst were: 1) Not admitting they are ever wrong such as staying with a bad trade in the hope it turns around. 2) Freezing up when it's time to enter or exit a trade. The worst want more confirmation of information and by the time it arrives, the profit opportunity is lost.

Approach it as a business was the investment tip of the week from the trading group. Whether it applies to poker or to the stock market, it's sound advice.

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