10 Day Trading Tips And Strategies
If you are day trading or just starting out, you may get lost, easily confused and even overwhelmed because of the endless information online that will bombard you.
What you have to bear in mind is to keep calm, do not rush, take is slowly and learn the proper way of day trading.
Here are some day trading tips and strategies for experienced traders and beginners to learn and absorb.
10 Day Trading Tips And Strategies
1. Do Not Be Overwhelmed
It is quiet understandable that you sometimes can feel overwhelmed about day trading, especially if you will look for information online.
Most day trading strategies will surely confuse beginners.
And the only way that you can guard yourself against this overwhelming feeling is to limit it or at most, avoid the cause of it.
What you can do is to find just one mentor or someone from whom you can learn from and piggy back on whatever success you can. And from there you can focus and learn until that point when you are sure of what exactly you are doing.
2. Begin With The Basic
Some of those who are just starting in trading have the tendency to jump right into the market even without real knowledge or background about the markets.
For you to have a sound basis in trading, time must be devoted to learning how markets truly work.
You must have a very solid understanding of the basics of trends and support and resistance before even diving in and begin learning trading strategies.
3. Learn One Strategy And Master It
You don’t want to start trading a new strategy or trading habit too often.
Most traders will usually hop from one strategy to another in no time.
If you are using common sense and logical trading strategy, based on price action, you must learn it at heart and have it mastered before hopping into the next strategy you are lured to try.
If you continuously jump in from one strategy into another in the hope of finding the Holy Grail strategy, you are running on false hopes.
The result of this, you lose money.
Also, you should never switch strategies simply because of losing streaks. Remember that each of trading strategy has certain losers in a sample trade size.
You should never let losing trades get too much of your worries. What you need is discipline if you intend to become a successful trader.
4. Trades Will At Times Move Against You. Keep calm.
A common mistake of traders is their freaking out reaction during those times when signs of trades move against them.
You will see this much more often when live trading as compared to demo trading because of the differing emotions between these two.
The freak-out reaction is a problem that you must learn to address.
You must realize that trades will move against you. You don’t want to immediately close out before the trade even hit your stop loss in fear of losing money as well as profits.
Not realizing that these trades can reverse and become winners, is the reason why you must at least let your trades play out and not automatically exit on the first sign of the trade moving against you.
5. Price Action Must Be Your Focus
Before computers, live charts and trading softwares traders read tapes or had price posted on large boards for them to read as well as interpret the action of the prices.
Price action trading is considered to be the only natural trading strategy, used since 1700 when the Japanese traders came up with the candlestick charts.
Monitoring and interpreting price action works, and you need not complicate yourself with overcomplicated and messy indicators.
The latter will just waste mental energy, time and money.
6. Master A Risk Management Strategy
Steady and step-by-step risk management is one strategy that most often wins the race.
When you trade at high frequency, it usually leads you to the world where you are likely to commit emotional mistakes in trading.
This can, unfortunately, destroy not only your trading account but more so, your self-esteem and confidence.
While you might have read about this a lot of time, but, the realization of it may not hit you until it is already too late. There is no need to trade and risk huge amounts of money.
For you to be able to understand the reason behind this, you must have a good grasp of the topic about risk management and position sizing.
7. Stop Losses Should Not Be Placed Too Close
A lot of traders will usually lose huge amounts of money before they realize this one big thing.
That you have to place your stop loses in such a place that is safe and distant from the entry price but also gives you a good risk reward ratio.
If you commit the mistake of putting stops too close, you will be in a situation wherein you are stopped out for a loss even before the market had the chance to turn into your favor.
You might have had the right trade idea, but by placing your stop loss very close, you will be stopped out even before the anticipated move happen.
8. Be Realistic
One of the hardest things to do when you are a day trader is how to be realistic.
Is it possible that you can earn money through day trading?
Sure, you can. As in fact, there is no profession in this world which can give you as much potential as trading.
But, it will never be an easy journey. It will come with a very steep cost. It will not be mentally easy. Or not easy at all.
You will come across numerous mistakes and mental traps on your way to success. Being realistic and well-grounded may lead you to the best path and an unparalleled trading success.
However, traders who have dollar signs in their eyes tend to over leverage or risk a lot leading to overtrading and consequently, losing huge amounts of money.
You sure do not want this to happen.
9. Master This Simple Timing Strategy
Most of the traders usually get confused about the conflicting information that charts usually provide on differing time frames.
What looks like a buying opportunity on the daily chart can appear as selling signal on the intra-day chart.
If you take your trades based on trends on a daily chart and you are using an intra-day chart to confirm entry, make sure that the two are synchronized.
Simply put, if the daily chart is showing buy signals, wait for the intra-day chart to confirm the signal.
Always sync timing.
10. Go With The Broker With The Ideal Trading Platform
It is very crucial that you go with a broker who will offer a trading platform that will allow you to perform your analysis that you require, it is of paramount importance to your success.
Take some time to do your research what different brokers can offer.
Make sure that the trading platform of the broker is suitable and ideal for the kind of analysis that you intend to do.
Good broker yet poor platform, or good platform yet poor broker leads to a huge problem. Make sure that you have both worlds.
For all the charts and numbers, day trading is an art. And in every artistic endeavor, talent is involved, and talent will take you far.
The best day traders take the time to hone their talents and skills by utter discipline and constant practice for successful day trading.
To Your Day Trading Success,
Team Trading Walk