Once traders decide to become a day trader, then, he or she needs to learn many things. If you are one of those new day traders, this article will help you find 10 strategies to be an amazing day trader, which includes the type of orders and risk management you should utilize.
1. Make A Trading Plan
Before you risk, even, a single dollar, you need to know the ways to make a profit. Then, those ways to gain profit should be written as your trading plan.
A trading plan defines as a personally written document consisting of the asset, the time, and the ways you place a trade. Besides, your trading plan will also tell you the right moment to exit the trades with the highest profit. Other than that, you can also add several additional rules.
2. Exercise the Strategies Before Trading with the Real Money
Once you have created a trading plan, you have to see its performance through a demo account. A demo account is an account that allows you to trade in the real market with no real money.
If your plan does not bring profit in that demo account, it will not work in the real trading account. If that happens, you need to revise the plan. Do the same thing again until you gain sufficient profit in your demo account.
3. Create a Day Trading Routine
Day trading routine helps you to avoid mistakes during trades. The routine includes the time you start, check the schedule data release, and quit trading. Besides, that thing, you have to also make a checklist of things you have to do in your trading routine.
4. Never Hold Position During the Announcement of High Impact News
The announcement of this news can highly affect the market. Yet, we will never know the direction and how far will the news bring the asset’s price on the market.
Thus, you have to stay away from the market during that moment, wait until the news is released and find the strategies to capitalize on the volatility.
5. Do Weekly and Monthly Trade Review
An annual review will help you picture your overall trading result. You will know whether you do good or poor in all of your trades.
To do it, you need to have the screenshot of your daily chart that contains your trade. At the end of the week and month, review them, to know the area of your trading plan that need to be improved.
6. Create a Mental Checklist
Every time you watch the price chart, you will be easily distracted. Thus, you need a checklist consisting of the specifications that you need to meet in the trade
7. Prepare a Plan for When the Weakness Appear
Every trader has his own strengths and weakness. The weakness can be like not taking a loss when they should or taking trades that do not align with his trading plan. You will find your weakness after spending some time on the market.
If you do your weakness, unconsciously or not, you need a plan to a minimum the loss. This plan should be prepared prior to when you enter your trade.
