Day Trading Is About Trading, Not Gambling
The one thing that both winners and losers in games involving gambling have in common is that they will continue to gamble no matter what happens. The commonality between gambling and day trading, however, is that both have their share of losers, and in day trading, the losers are usually gamblers.
While trading and gambling are two very different activities, a large number of traders behave more like gamblers than proper day traders. People who win while gambling often believe that they are on an unending streak of good luck, and will continue to gamble, until all of their winnings have been lost. Losers, likewise, will continue to gamble even though they have lost significant amounts of money in the belief that they will be able to recoup their losses. Many failed traders trade in this manner as well.
Proper trading is very much unlike gambling, however, although many immature and inexperienced traders tend to act in much the same manner as a gambler, over trading in order to earn more profits.
In theory, a day trader should be far above the level of a gambler, and should instead aim to become a strategist. A trader will only achieve this if he or she develops the required skills and discriminatory attitude towards trading, and also comes to the realization that the market usually moves in a certain manner that can often be predicted with some degree of accuracy.
Day trading harbors no secrets, and movements of the market can be predicted using indicators and the patterns followed in the past. Traders must also realize that the market is largely dependent on psychology and they must learn to become attuned to this. These skills take time to develop and master, however, and only when a trader has spent enough time practicing and honing his skills will he become truly successful.
Overtrading does not work, and traders who do so either lack the requisite knowledge to succeed in the business or still retain the immature attitude so commonly found among amateur traders who have little or no experience.
Some of the most common reasons why amateurs trade are that they wish to affirm that they are capable of doing something well and that they have developed a successful system; attempting to prove that they are able to earn a profit through trading; they are attempting to reverse their fortunes when they are losing money on their trades; or they simply have the same attitudes as gamblers do and wish to take advantage of what they believe is a lucky streak in order to earn more profits.