Day trading are market positions that are held for a short time .The trader open and closes the market after some minutes or hours, not exceeding one day. Day trading is not a complicated concept but run or rules –based strategy anticipating the movement of the market. Here are 10 secrets that you will learn in day trading school.
Look for an imbalance between supply and demand.It is a perfect entry point.
Financial markets play the general rule of supply and demand. When something is near exhaustion, the price will shoot.If there is an excess product in the market, the will to buy will reduce and the price will go down. During the learning, the student will identify these entry points.
Set price targets before you jump in
If you are after a long haul, decide in prior how much profit is acceptable and how much you can lose. Stick by the decision. Such strategy will limit the potential loss and do not be greedy. The exception is acceptable in setting new profit and stops –loss level once you launch your target.
Insist on a risk –reward ratio.
The ration should be at least 3:1. Such a ratio allows lose small and win big whereupon gaining experience the risk-reward ratio will go up 5:1 and higher.
Successful traders trend carefully. In fact, they do not trade on a daily basis. If the opportunity does not meet, your criteria do not trade.
In trading, you need to make the right trade your second nature.Impulsive behavior is a trader worst enemy. You might be lucky to get away with greed but with time you will incur and probably get kicked out of the game.
Do not be afraid
New traders get paralyzed by circumstances. They watch the graph too much and cannot act promptly when a situation presents itself. If you have a concrete plan, you need to place the order almost automatically. If wrong your stop will save you before you incur heavy losses.
Never risk too much capital
Set a percentage of your daily trade budget and do not allow yourself to break it. Failure to do so will drain you the money and miss out on better opportunities in the market.
Learn from experience
No one is perfect in trading. It is always the game of minimizing cost and maximizing profits.When things turn out otherwise confirm that you followed the rules and did not get it and wrong at the wrong time.