What is the Most Difficult Thing in Day Trading and Scalping?

When new traders start day trading, certain preconceived notions are built up, either through talking with other traders or reading trading related books and online forums. These ideas normally relate to how many round trips one should trade during regular trading hours and what dollar amount one can expect to profit per day. These targets, although important as goals for traders, also have the effect of hindering the budding novice scalper in several very important areas:

Perceived Bias of How the Market Will Trade

The market is constantly changing in its reaction to external inputs and shocks. It is dynamic and very seldom does what the majority expect it to do. One just has to pull up a multi-month stock or index chart; there are so many variations in the way a market, security or futures contract can trade. It is therefore extremely naive for a novice scalper to have a mentality to trade the same way, day in day out, every day. It is vital for survival that a scalper be flexible to the ever evolving conditions offered by the market.

The Most Difficult Thing for a Scalper

For those who have been trading for years will know, the most difficult action for a day trader to take is to do nothing. Yes, if the market does not present high probability trades, it is better to sit on one's hands than try to "create" a non existent trading opportunity, just for the sake of fulfilling the "quota" for the day. Any experienced trader you talk to will have numerous stories of when they should have just stayed out of the markets. For a day trader, one wrong move could mean giving back a few days or weeks of hard earned profits. Many S&P futures (spoos) traders, especially, will be able to relate to this as it is a common spoos newbie mistake to force trades during lunch hours, especially after missing out on a massive rally or selloff just after the market opens. Lunch hour is normally when the floor traders or "locals" in the S&P pit go hunting for stops. This is when one quickly learns that the markets are ruthless and unforgiving, especially to those that make silly mistakes.

In conclusion, the sage advice would be to just watch the markets when a high probability opportunity does not present itself. It may seem that the trader is not working, but remember, the act of watching and following the markets is in itself adding to the trader's background knowledge and intelligence about the markets.