Day Trading - Tips for the Beginner
Most of these day trading tips are result of my own misfortunes and experiences. I think it is better to learn from someone else's mistakes rather than your own so hopefully these will save someone out there some cash. In no particular order, these tips are all equally important.
• Invest in yourself. I did not - at first. I tried to be hard headed about learning to trade on my own - some of that was just being cheap. After much trial and error trading, I had lost a bundle. Seeking the advice of a seasoned trader will help you cut down the learning curve and protect your account. Invest in your education just like you did by going to college, a trade school, etc. • Treat day trading like a business instead of a hobby. This one is closely related to the tip above. If you expect day trading to eventually pay your bills, how do you expect to accomplish this is you don not put in full time hours? If you treat it like a hobby, then that is all it will ever be - a very expensive one at that.
• Trade only with RISK CAPITAL - money you can afford to lose. If you are opening an account with next month's mortgage payment then you do not understand this concept. This is called trading with "scared" money. If you do not have at least $5000 of risk capital then I recommend saving up until that is possible.
• Trade the appropriate amount of contracts for your account size. This can vary depending on your trading strategy but never put your entire account at risk. Trading too many contracts on too small of an account is a recipe for disaster.
• Do not guess which way the market is going. The market is going to do whatever it wants to do. You can not stop it. Watch and react to your setups.
• Set daily and/or weekly profit goals and stick to them. In other words, do not get greedy. It is usually the first trade you make after you have met your goals that takes all your profit back.
• Take advantage of simulated trading. Most brokers will give you a free simulated account. Never trade cash money with any strategy until you are comfortable that you can consistently be profitable. For some that day may never come, but I would recommend at least 2 - 4 weeks.
• Always use a stop loss. This has been said over and over again but it is the truth. More importantly, never move your stop loss farther away from your entry price or cancel it all together.
• Become an expert at exiting and managing a trade. The entry of a trade is really not that important. Successful traders make a living on letting profits run and keeping losses small. Most everyone can make money when a trade goes exactly as planned. But what is your plan if they trade does not go as planned? There is truly an art to this and it takes years of practice to become good at it.
• Have fun! I know a lot of traders who are mad when they lose and mad when they win. If you are not having fun in your chosen profession, then make a change. The emotions of being a day trader are off the charts so you must enjoy what you are doing or you will be miserable.
Questions and Answers
Discover how to use free forex forum and chat room as a starting point of your trading career. There is a tip how to find billionaire mentor from trading forum and how to get 6 figures income job as a trader using free forex forum and chat room.
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