Eight Day Tradng Strategies That Will Keep You Alive in the Field
Knowing some day trading strategies tried by veteran traders out there will help you profit consistently in day trading. Day trading is not about gaining or losing money each day. It is about gaining or losing money in the long run. If you are able to follow these tips, you will be able to gain money consistently, or at worst, when luck is bad, you will lose an amount that you can tolerate. So here are eight day trading tips to ensure your consistent success:
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Cut losses. Beginning day traders should not hang on to positions which they know are losing. If you find out that you are wrong and you are losing money from your trade, exit the position immediately, because chances are that it will stay stuck there for the day.
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Have stop-losses for each position. Think to yourself all the time: If you lose a certain amount of money from this position, you will exit the position. You won't wait for it to climb back. This is necessary especially if your bankroll is small.
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When you gain money for a trading day, take your gains off immediately. Don't expect that just because a position has done well for you today, it will continue doing well later or tomorrow. It may or it may not. However, continuous sure gains are preferable over big gains that cause you to sweat.
If you have a system which works well, stick to it all the time. Do not try to make exceptions to your system unless you are a highly experienced trader already. It is preferable for you to have a system that works in the long run rather than make potentially disastrous exceptions.
Be more neutral to risk than you normally are. Shrug off the risk aversion you may have obtained from a salaried job. Remember that even if you will gain money sometimes and lose money sometimes, if you make money int he long run, all is well.
Don't trade with money you can't afford to trade. In day trading, you need your own bankroll. So have enough money saved first before you begin trading. Also, don't borrow trading money from others (especially in an attempt to gain back previous losses).
Be responsible for your own trading fate. You are the one doing the trading, so don't blame anyone for bad outcomes - bad outcomes can result from good decisions mixed with bad luck.
Respect chance. Even if you believe that you made a good decision in a trade, there is always the probability that you will lose money from it. So judge trading decisions before the fact, not according to its results. Also, a bad decision may lead you to make money, but it's still a bad decision. Don't repeat it once you know it was a bad decision.
Having day trading strategies on your belt will help you earn more money, keep the money that you earn, and avoid serious losses. Remember them and become a veteran in the field.