Lately I have been getting this question a lot. Part of the reason is that the day trading industry moves in cycles. When the market is doing well then more people tend to gravitate towards day trading. You will also notice more advertisements geared towards an active trading lifestyle and all the things you can buy with your new found success. Most people just dive right in and go for it while others take a more cautious approach, wondering what their odds are. Today I will share one skill that you better learn if you hope to make it as a day trader.

We all love to picture ourselves buying some hot stock only to have it shoot higher in just a few minutes where we quickly exit for a healthy profit. Sometimes that does happen but the real success comes during all the other times where a trade may be challenging or moves against you towards a loss. The real success comes from those that know how to handle a trade from start to finish. The industry refers to it as trade management.

Trade management includes many factors. The first is your share size. When you pictured yourself buying that winning stock how many shares did you buy? This is an often overlooked, but highly necessary aspect of trading. Too many shares and you could sustain large losses. Too little shares and your profits may not be enough to make it worthwhile.

Another thing you want to focus on is how you will handle a losing trade. This may be a simple as placing stop losses, but where and how far away from your entry? Many get tripped up here because they cant seem to find a good reason to cut a losing trade. You may choose to exit based on a technical pattern you have identified or due to a loss of a certain dollar amount. Without a plan for this you will most certainly lose.

Day trading doesn't have to be difficult. Many studies show that you have a 50/50 chance of a winning trade so managing that trade is your real edge. Spend time on trade management and less time on strategy development and you will be one step closer.