Day trading consists of buying and selling a financial instrument within the same day. Day trading allows you to take advantage of small price movements. You can trade where and when you want, and you can trade from your office, home or while traveling, thanks to advance mobile platforms and the increased popularity of day trading.
Know your state of mind
You need to be focused because day trading is hard work and requires constant attention. Be motivated and manage your thoughts. If you feel you are not focused enough, don’t hesitate to take a break.
Define your rules and follow them
To trade in a disciplined way you need to define a set of rules to help you with your trading decisions. Your rules should be designed carefully. Trading with your rules can greatly increase the odds of succeeding in the markets. Follow you rules and resolve your bad habits. Re-evaluate your rules at the end of each month and check every day to see if you are following them.
Manage your money
Money management is one of the essential elements of successful trading. There are whole books dedicated to money management and if you are planning to trade for many years, you need to apply successful money management strategies. It doesn’t matter if you win 90% of the time if your losses are much larger than your wins. What’s important is that your wins are larger than your losses.
Use risk management
Always use stop losses to manage your risk when you are placing your orders to enter the market. It is crucial that you take actions which protect yourself against the sudden movements of the market and pay attention to the scope of losses that you feel comfortable with.
Warning of high risk: Trading at all levels and in all its forms represent an activity of elevated risk. As it is entirely possible to suffer heavy losses when trading with any online broker, trading is not an activity that is suitable for everyone. Traders must be aware of the fact that returns are not guaranteed and that they may lose some or all of the money they have invest. As such, it is of the utmost importance to only every trade with disposable funds you can afford 100%. Before getting started traders must actively consider their goals, expectations, attitude to risk, and personal financial circumstances. You need to know the risk involved when trading and understand exactly how to proceed, by following your trading style and situation. If you require advice or assistance, it should be sourced exclusively from a registered independent financial advisor.
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