Smart Day Trading Rules And Methods
There are 3 basic legs or basics underlying all day trading rules: the Strategy, the Psychology and the Risk Trade Management. Below are some day trading rules that bear taking notice of.
A large part of day trading is mental. One needs consistency in one's mental makeup since the market is largely a random walk and you're in the fight and need to be alert and ready to act reasonably. There are times the market does set up to give you an edge and you must be mentally prepared to take advantage of it.
One needs to wait till the setupright situation develops and then grab it. One must discipline oneself to hold-up till the exact interval and then act with certainty.
This game requires one to limit their mistakes and minimize their losses. Discipline is paramount. These rules are the result of individual back testing and verified by the trader.
One always need to protect their capital with a stop market order so to keep risk at a minimum. Pass on the trade if the risk is too large. One needs to simulate trade until they have all the mechanics figured out and can exercise smoothly.
One must be awake and not emotionally stressed. A clear headed mind in order to make decisions and act on them without emotion is vital. Controlling ones emotions helps in order to bounce back quicker after losing trades. A solid assurance can emerge when emotions are left out of the equation and past results show a positive capital increase.
Keeping a log or diary with details of the how and why is a must. This is a way to hold yourself accountable. As the trade developed, not your feelings and thoughts. In retrospect, you'll have a log you can refer to and self-diagnose. You'll get a birds-eye view of how the system is working.
One needs a clear method and objective to back up against and to trade with. Trade with a set of rules that you can know work! Keep a list of your day trade plans on index flash cards so you can review the theory is if necessary before you make a trade. Back testing your method is vitally important. One needs to back test and have assurance oneself that the strategy is on target. Finding good day trader software may be helpful.
Money management rules need to be fixedly adhered to. Never risk more than 2% on any trade. Capital preservation is the number one rule and one doesn't need risky temptations. One can lose around 50% of their trades and still make money with good disciplined money management policies.
Trading can be a very prosperous career choice. If you are armed with a winning method, sound money management and have you emotions and psychology on an even keel, life can be rosy. Even a day trading stock tip may prove workable with the right strategy.
A large part of day trading is mental. One needs consistency in one's mental makeup since the market is largely a random walk and you're in the fight and need to be alert and ready to act reasonably. There are times the market does set up to give you an edge and you must be mentally prepared to take advantage of it.
One needs to wait till the setupright situation develops and then grab it. One must discipline oneself to hold-up till the exact interval and then act with certainty.
This game requires one to limit their mistakes and minimize their losses. Discipline is paramount. These rules are the result of individual back testing and verified by the trader.
One always need to protect their capital with a stop market order so to keep risk at a minimum. Pass on the trade if the risk is too large. One needs to simulate trade until they have all the mechanics figured out and can exercise smoothly.
One must be awake and not emotionally stressed. A clear headed mind in order to make decisions and act on them without emotion is vital. Controlling ones emotions helps in order to bounce back quicker after losing trades. A solid assurance can emerge when emotions are left out of the equation and past results show a positive capital increase.
Keeping a log or diary with details of the how and why is a must. This is a way to hold yourself accountable. As the trade developed, not your feelings and thoughts. In retrospect, you'll have a log you can refer to and self-diagnose. You'll get a birds-eye view of how the system is working.
One needs a clear method and objective to back up against and to trade with. Trade with a set of rules that you can know work! Keep a list of your day trade plans on index flash cards so you can review the theory is if necessary before you make a trade. Back testing your method is vitally important. One needs to back test and have assurance oneself that the strategy is on target. Finding good day trader software may be helpful.
Money management rules need to be fixedly adhered to. Never risk more than 2% on any trade. Capital preservation is the number one rule and one doesn't need risky temptations. One can lose around 50% of their trades and still make money with good disciplined money management policies.
Trading can be a very prosperous career choice. If you are armed with a winning method, sound money management and have you emotions and psychology on an even keel, life can be rosy. Even a day trading stock tip may prove workable with the right strategy.
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