Steps For Day Trading Success

Steps for Day Trading Success

If you want to be a success at day trading, there are a number of things that you need to do first of all. The most important is of course to take a day trading course to understand the strategies to employ and the indicators to look for. From this you can formulate your day trading plan which will describe in detail when to trade and how to exit your trade. There is no substitute for a thorough trading education, particularly if you are intent on pursuing the fast-paced world of day trading.

The next thing you need to do is set up an account with an online broker. Be sure to choose one that has a good reputation, and not just the one that gives the cheapest commissions. For faster trading, consider using a direct access broker. Your broker may have a data feed available for your trading, or you may choose to subscribe to a separate service which can give you the performance you need. Above all, you need a responsive and accurate service in order to decide on and make your trades in a timely manner.

Your success depends on formulating both a good day trading plan and implementing it properly. This is where many would-be traders fail, as they find it difficult to keep their emotions in check. You must learn to be disciplined in your actions, and never hesitate in following your plan, particularly if it is necessary for you to cut your losses on a losing trade. If you think it is hard to exit the trade and take a loss at your chosen exit point, just consider how much more difficult it is if you stay in the trade and your potential loss rises.

Your trading plan should be thorough enough to give you direction in what to do in any circumstances. This may include staying out of the market if there are no reasonable opportunities, and another common failing amongst beginners is to think that they must always have money in a trade in order to be working. When the opportunity is not there, then it is folly to try to engineer an opportunity.

There are several elements to your day trading plan. In addition to identifying opportunities to enter a trade, it should define your exit points. You must have more than one exit point, as it is necessary to plan in advance both how much profit you expect to make and what is the maximum loss that you can take on the trade. Depending on how the trade progresses, either of these could end your trade and you will not know in the beginning which it is.

There are several different methods of day trading, but many require you to trade with the trend. This is the safest method, as trading countertrend, although potentially profitable, is statistically more difficult and less likely to make a profit. Many systems require you to wait for a pullback in a major trend, identify the start of the price returning to trend, and place your trade appropriately. Your trading plan will provide details of the exact parameters.

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