A Day Trading Robot Can Help With Discipline
For those traders looking to be more active participants in the futures markets, active trading can be quite daunting. There is a large learning curve associated with getting skillful, and even then it really is not for all people. A high learning curve usually means losing cash. One has to master what not to do before you can see what you ought of do. The greatest instructor of that is capital. There are 2 ways 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.
Unfortunately for most, when they see they lose some money at trading, rather than understand the right lessons about why they lost, instead they modify the perceived “cause” of losing. This is particularly bad if a trade is exited only to see it reverse back in the path the trader was betting on. So they end up saying “I will not let that happen to me again”, and usually ignore stop outs. This is based on the incorrect notion that because the market changed direction once when you exited at your stop (or many times) that this will always be the case. Your brain has an odd way of only concentrating on “lost” pleasure. Pleasure here is winning some money from the equities markets. It totally ignores the stop where the price then fell another 5 or 10 percent more. This is because the stop price was “correct” and that actually satisfies the brains need for pleasure, although the trader still lost capital. So what ends up happening is the brain is concentrated on avoidance of adverse results, or being wrong.
This type of pondering is incredibly hard for most to overcome, and is probably one of the top reasons most do not make it as a day trader. You have to know that losing is part of the game, and since the game is basically an odds play (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 overlook the losses if you adhered to the rules.The other reason is usually undercapitalization and lack of understanding of the futures markets movements.
One of the ways some discover to triumph over limitations is through the use of a day trading robot. This is a computer program which is created to make trades in the stock, futures or forex market and produce buy and sell signals. Especially when someone is just starting with trading, this type of tool can be invaluable to help with self-control. A computer will exit because the rules say so, there is no override or judgement involved. Of course one should be very aware of the quality of the day trading robot, as many really are not so good. I always suggest anyone who wants to use one to only do so on a demo account (not real capital). As with any tool, there are inherent limitations as to what they are able to do and the types of market motions 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 currency trading.~
