Trading like a professional
Preparation for day trading as a pro
Prepare your trade plan. The preparation is the most important step in day ‘trading like an expert’. This includes understanding the financial instruments needed to trade and how to best manage trade risks, money management and trade entry. Without first looking at the economic news, no serious day trader will ever trade. Before you enter any trade, it’s important to check the economic news at the right time. Only careless traders will ignore economic news. You can access economic data at Yahoo/finance Google/finance and MSN/money. Then, you’ll decide what to trade based upon technical analysis and fundamentals.
You must observe the London’s opening bell at 3 AM eastern, 8 AM London time and New York’s opening bell at 09:30 Eastern time, 14.30 London Time. Before placing trades you must wait for the opening call. You will need to prepare for eight steps before you can start trading.
First step after day trading preparation: 5% rule
Day trading involves risk. This should be understood early on. Trading decisions can be risky and there will always be some risks. Traders must ensure that they protect their trading capital. You should only use five percent of the trading account for money management. Five trades can be opened. However, you should limit the amount of money that you allocate to these trades to not exceed five percent. After you reach the five percent, you stop placing any trades.
Second stage in day trade like a professional
Many traders trade during the New York and London sessions. It is quite common to be tired and not have enough time to rest. Over-trading is the biggest problem in this instance. The brokers must be paid commissions for each trade. To avoid paying excessive commissions, you need to limit the trades you take. Traders need to be careful not to take unnecessary trades in order avoid losing money. The expected reward should exceed the risk. Before entering any trade, you must consider the risk-reward relationship.
Third stage in day trading as a pro
If you are able to buy or make a sale at the right moment, it is a win. The opposite is true. If you sell or buy at an inappropriate time or place, it’s a loss. Day traders will be able to trade like pros by being able make quick decisions and understanding the language of price and momentum indicators. Day trading can be compared to American rugby or American football. The act of buying another person’s stock is called selling. It is important to choose the right strategy for every trading problem. Trending strategies are best used in the trending phase, while range trading is better during low volatility.
Fourth step in day Trading like a pro
Day trading with indicators. One of the main reasons day traders fail to succeed is that they misuse or misunderstand indicators. Many indicators just repeat the patterns of price. These indicators are in fact different versions the price. They are not able to replace Certus Trading Review the price as the number one indicator.
The price is the universal language that all traders use and it does not hide anything. Traders must be open-minded and look at the price as a way to discover what it is telling them. The price may change, but there are many indicators. It is important to examine the price first before looking at any indicators when day trading. Next, take a look at the price once more before entering the trade.
Traders should be able to understand and master each indicator. The market will never move if you have to sell at every slow stochastic high and buy at every low slow stochastic low. Market traders have suffered more losses from the misuse of the slow stachastic than any other indicator. Day trading is different to gambling and day trades like a pro are different from gambling.