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Day Trading Rules In Order To help You be More Successful

Day Trading Rules In Order To help You be More Successful 

In order to be successful with day trading you need to follow certain day trading rules. These rules are designed for the most part to protect you from yourself. Day trading can be fun and can make you a lot of money. It can also destroy you if you are not taking the time to do it right. Following are a few simple guidelines that should be followed.

Be sure to enter a trade at the right time, exit at the right time, and escape at the right time

If you want to be a successful day trader you will need to make sure you have a solid enter price for the trades you want to get into. Next you will want to make sure you have an exit price. Lastly, you will need to have a worst case scenario price. Setting a proper stop loss will keep you from losing your shirt in day trading. Knowing when to get in and out will help you to lock in gains.

Do not start trading as soon as the market opens up

When you first get into day trading, make sure you avoid any serious trades in the market for a while. You want to wait at least 30 minutes to begin trading. The first 15 to 30 minutes of the market being open are usually panic orders or orders that were placed the previous night. The market open is not a good time to start looking for good opportunities.

Be sure you are using limit orders and not just simply market orders

When you place a marker order what you are essentially doing is informing your broker to buy or sell at a price that is the best currently available. This is not going to mean profits for you in a lot of cases. When you place a limit order instead you have a lot more control, particularly regarding the highest amount you will pay to buy and the minimum amount you will accept to sell.

If you are a beginner make sure you are not making choices based on margin

When you decide to use margins you are taking out money from the brokerage firm you use in order to bankroll all or a portion of a trade. If you are a full time day trader you will be given a wider margin. A lot of this is going to come down to how much money you have in your trading account. The higher the amount the wider the intraday margins.

If margins are used the right way then they can help to increase the level of return a person might get. If a trade goes the wrong way though, then these margins will increase your level of loss. The rule of thumb is this, if you are a newbie to the game of day trading learn how to trade without using margins at first before you make the jump.

Make sure you have set a goal for when you plan on selling

a lot of traders, particularly those who are just getting started will invest a lot of time into what stocks they want to buy. A lot of them will not put too much though into when they should get out. If you hope to be successful long term playing the day trading game, then you will need to know the right time to exit. This will protect you from loses.

These day trading rules will help you in the beginning, but there are many more that you need to learn in order to be successful. There are a lot of people who lose a lot of money trying to day trade. The only way for you to not be one of them is to be disciplined and take the time to learn the game inside and out. It is worth it and it can put you ahead of other day traders.

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