Day Trading is a very lucrative field and there are many millionaires that have made their money by trading stocks, currency, bonds, and investing in mutual funds. Are you thinking of entering the fast-paced world of electronic daytrading?
Note: The tips presented in this article mainly applies to electronic daytrading. But these tips can also be used for forex trading, currency trading and options trading.
What is Day Trading?
Day traders carry out day trading by purchasing and selling stocks rapidly on the same day. At the end of the day all stocks bought must be sold irregardless of profit or loss.
But don’t be fooled by all the glory of day trading. Day trading is difficult and should not be done without the proper knowledge and practice. Estimates are that 80% to 90% of all those who begin electronic daytrading today will lose their trading capital within the next 12 months.
Day trading is like running any other kind of business. Day trading can be stressful and requires guts and a keen business sense.
Here are some tips that will help you to succeed with electronic daytrading:
Be picky when selecting your trades. Remember, the important point is how much you earn in a month and not on how many times you execute orders.
No matter what the market is doing, you must demand that it moves in your favor right after you enter, otherwise you get out as close to break even as possible.
Have faith in your methods.
Decide each day how much you are willing to risk and stick to it.
Always have your exit strategy in place before you make a trade.
Characteristics of Successful Traders
If you want to succeed with electronic daytrading, then you should do exactly what the professional traders do:
After a bad trade professional traders spend time figuring out what happened and then they adjust their current methodology to account for this possibility next time.
Successful day-traders believe in their indicators but also are aware that nothing is 100% foolproof.
Successful day traders have a system or method and stick to it rigorously.
A winner realizes that he produces the emotions he experiences related to electronic daytrading and assumes responsibility to resolve deep-seated root causes for negative emotions that interfere with his trading business.
Winning traders understand that winning in the markets means "cash flow".
In Conclusion
Keep in mind: Trading should be good fun, and exciting too, and if you want to day trade for a living, not only must you make good money, but you must enjoy it as well! If you are long, and price starts to fall, NEVER lower the stop. The single best way to protect your profits is to lock them in. Let’s face it: A lot of money can be made with day trading, if you are prepared. And preparation means having a solid knowledge about the markets and how they work, having a proven electronic daytrading strategy that works and having the discipline to actually follow your trading strategy.
