Day Trading Stock Tip

YOUR DAY TRADING STOCK TIP WILL NOT COME FROM CNBC AFTER 12:00 NOON EASTERN

Your day trading stock tip will not come from CNBC after 12:00 noon eastern. I am bringing this up because I've seen too many day traders who quit their jobs and follow what I call the "CNBC Setup" as their day trading stock tip. They are so excited because they are able to finally trade full time. They feel they've been at a disadvantage all of these years, getting quotes and day trading stock tip from the Internet, sneaking trades onto their computers in between meetings, and hearing about key news events only after the markets have already closed. So what do they do? They plop a TV down right next to their computers, turn on CNBC, and glue themselves to the screen, looking for a day trading stock tip. CNBC has a very specific job: To provide enough entertainment to viewers so they tune in and watch. With a lot of people watching, they make more money from the commercials. It's as simple as that. CNBC is fun to watch, and when things get serious, they do a great job reporting. I found out about 9/11 as it unfolded live before my eyes from Mark Haines. I flipped to some of the other channels, but ended up parking it on CNBC that day because they did, hands down, the best job reporting about it. Who can forget Maria Bartiromo reporting about the event, covered in ash and soot just after the first building collapsed? It was a gut wrenching experience to watch, and they did a great job.

That said, my day trading stock tip is that a trader must realize that they cannot make a living "trading the news" off of any financial news channel. By the time it appears on television, it is way too late to react. Trading floors have already heard the news and by the time it makes it to the public they are closing their positions, ideally to suckers who just saw the headlines, the news does not provide day trading stock tips. If anything CNBC can be used as a fading tool--taking the opposite side of the news. Once they run out of stories and start repeating the same things over and over, I turn down the volume and will either turn on a commercial free music station or, once in a while, plop in a DVD.

Traders who do this for a living spend their days waiting for specific setups to take shape. Yet one of the biggest weaknesses for most traders is a need to be in "every move." If the markets start running away, many traders just can't help but jump in, fearing they might lost the day trading stock tip and they may be missing something big. This is a fatal flaw that will ruin any traders who can't control this habit. By listening to music or keeping a DVD on in the background, a trader has something to pass the time while they wait for their specific setup to take shape. This makes them less prone to impulsively jump into trades just because they are bored or because they can't stand missing out on a move or day trading stock tip. The goal is not to catch every move in the market. The goal is to take the specific setups that a trader has outlined as a part of their business plan. Otherwise they are just a gun slinger, and sooner or later all gun slingers get killed.