Success In Day Trading

Day Trading Commandments

Day Trading stock online gives the thrill of the hunt for the convenience of an easy chair.  Day trading holds potential for fast profits sometimes could be intense and risky.  The most successful day traders understand the process and are willing to commit the time necessary to monitor the markets for hours to catch the slightest favorable change.  Day trading combines research and instinct with fearless action.  If this sounds appealing, start with the 10 commandments for the success of Day Trading.

1. Set Limits on trading funds

Newcomers to day trading need to gain hands-on experience in the market.  Start with a reasonable limit of money that you could afford to lose without sacrificing the car payment, since the potential for profit or loss is great.

2. Set Limits on Losses

Why ride a downturn hoping for a miracle upswing ? As the old saying goes, “know when to cut your loses”.

3. Manage your expectations

Sure, day traders can hit the right time and double their money in a matter of minutes.  They could wither out fast.  The day trading offers good profit making potential but does not come with a guarantee.  Avoid betting on one stock and remain contented with gradually increasing the value of your trades.  Day trading is about risk taking rather to mindless gambling.

4. Determine a Trading Strategy

Day trading requires keeping up with the trends and ranges, but does so on a shorter timeline.  Another useful approach is to focus on specific types of business or industries to develop
expertise.

5. Trading is the means, not the end

Day trading is fast paced calling for the slow down.  Trade frequently just to keep trading by
generating fees for online brokerage.  Take your hands off the mouse and think before you click.  Day traders might make three trade in a day or 12.  It is not the number of trades but the result that counts. 

6. Find the Trends

Trend analysis shows changes that indicate an up or down move in stock prices.  Since day trading is to active, you may choose to subscribe to trend reports rather than take time to develop charts.

7. Lose the Emotion

The thrills and chills of the day trading must be kept in check so that the buy / sell decisions are based on informed choices.  If you lose, let it go.  Dwelling on the loss only blunts decision making for the next trade.  Put your emotions within a range, neither too high nor too low.

8. Block the Fear

After tanking several times.  It is easy to start second guessing your day trading decisions.  Successful online traders have to rise above the fear of picking another loser and either work your trading strategy or make changes to improve it.

9. Ignore Hype

No matter how much a stock is touted in the tip sheets, if it does not fit your day trading strategy then it is not right for you.

10. Look Backward

Set a regular time to review past trades for profit or loss, application of trading strategy and information sources used.  And be honest, was the trade based on tips, facts or emotion.  You have to know what drives your day trading strategy to make it work for you.

Tips for Day Trading

Day Trading

What is Day Trading ?

It is perfect for the short term intraday trader, who would like to hold on to the position for a few minutes to few hours with a view of square their position before the end of that day. 

• Day Trading involve taking a position in the markets with a view of squaring that position before the end of that day.


• A day trader typically trades several times a day looking for fractions of a point to a few points per trade, but who close out all their positions by day’s end.


• The goal of a day trader is to capitalize on the price movement within one trading day.


• Unlike investors, a day trader may hold positions for only a few seconds or minutes, and never overnight.

Day trading could be further subdivided into a number of styles, including :

Scalpers

This style of day trading involves the rapid and repeated buying and selling of a large volume of stocks within seconds or minutes.  The objective is to earn a small per share profit on each transaction while minimizing the risk.

Momentum Traders

This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at tops.

Advantage of Day Trading

Zero Overnight Risk

Since position are closed prior to the end of the trading day, news and events that affect the next trading day’s opening prices do not effect your portfolio. 

Increased Leverage

Day Traders have a greater leverage on their trading capital because of low margin requirement as their traders that are closed in the same market day.  This increased leverage could increase your profits if used wisely. 

Profit in any market direction

Day trading often will utilize short selling to take advantage of declining stock prices.  The ability to lock in profits even as markets fall throughout the trading day is extremely useful during bear market conditions.

Day Trading Tips

• Buy Near Open Price,
• Check Buying volumes,
• Check derivative Status,
• Wait for the target price to buy,
• Strictly maintain Stop Loss,
• Down wait for huge profit in single share/stock.

“Get satisfied in small profit and do multiple trades”

In day trading, you could forecast eh move of the market using statistical tools.  If you take a proper training on stock day trading, you could minimize the risk based on mathematical analysis unlike the
instincts working in any of the gambling games.

Do not consider day trading as a tool to ‘get rich quick’ or ‘earn million overnight.