As a day trader, you keep an eye on potentially huge risks. For example, you may think you have great odds in a given trade, and you may think of going “all in,” but logic and discipline tells you there could be a variable that you didn’t consider or an event that may bring your trading career to a halt if you are too leveraged. Pros always keep at the back of their minds the one-off event they couldn’t anticipate. In light of this, they balance their approach. They know they can only control the size before the trade, and they trade according to that. Pros don’t have crystal balls; they don’t need them. Professional day traders respect the market by respecting risk. They assess complicated situations and ask themselves these questions: What does the market think? What are other traders doing? What is the probability of the market going up or down? Am I being realistic now? How much do I stand to win or lose? That is their way of staying grounded in reality.
