1. Knowledge Is The Key. As a day trader, you need to keep and be up to date with the happenings in the market, things that affects the market like the Economic News, Be you a technical or fundamental trader. As a day trader, you need to keep and be up to date with the happenings in the market daily, things that affects the market like interest rate plans and economy news, be you technical or fundamental trader, if you can keep track of daily happenings, you always have upperhand of making profits daily in the market.
2 Chosing One Or Two Pairs To Trade. This is very important, don't be a Jack of all trades and master of none. Choosing one or two pairs gives you rest of mind and narrowing your the way you expand your brain energy compared to wgen you try to trade more pairs. This makes you very focus, as you can channel all you energy studying, tracking and mastering the monthly moves of a pair or two, without over stretching your brain, always remember more pairs can make you confuse, and thereby losing money, but few pairs makes you muvh focus, and better chance of making profits.
3.Setting Funds Aside It is very important of you making assessment of funds you are willing to lose per trade and stick to it like you depend on it to survive. Much successful day traders risk like 1% to 2% of of their capitals per trade. If you have like $50,000 and decided to risk 2%, that means if anything goes against you, you only lose $1000 and still have a lot of capitals to plan for your recovering, don't talking a reasonable loss is part of trading, as you can always recover and be much or make times 4 of your loss.
4. Setting Time. For day trading, this requires a lot of time, you need all the time to scan the market, make the move at the right time. You need all the time to track the market, and make a move wgen the opportunity presents itself.
Sometimes during my 8 hours of normal trading, I found opportunities 1 hour left from my 8 hours set aside for trading and make a good use if it, at times i found opportunities earlier, that is just how it goes. So if you know you have limited time because you have some other things coming up to do, please close your systems and don't even consider trading for the day.
5.Taking Those Profits Too Soon Taking profits too soon is one thing you should try to minimize, unless you see that a trend is about to reverse and you take out the little profits to avoid being in negative trades. Otherwise why take out $10 profits for a trade you could actually make $50 or $100, thereby cutting short your opportunity to make bigger profits. Always try to track trend and leave your profits to increase before taking it.
6.Cut Your Losses With Limit Orders Or Stoplosses Like i ealier said, taking a reasonable loss is part of trading, nor proffesional trade that dont take losses. Sometimes I make like 40 trades for the day, I lose like 15 but the rest 25 i won will be 3 to 4 times higher than the losses or even more, so i still end up in huge profits. This is because I recognize that taking loss is part of trading. But always take a reasonable loss and don't wait till it becomes very huge, that is a no no no for me. That is a no no no for professional traders.
7. Being Realistic With Profits You Are Expecting Your strategy does not need to win all the time, any proffesional trader knows this. Sometimes you can win 50% to 60% of your trades, what matters is making more of winning than losing trades. I have been in a situation I only won 35% of my trades but still come out with huge profits, that is because I defined and set my loss limit. Always make sure you defined where to take loss and keep to it.
8.Being And Staying Calm As a trader doing day trade, there are times the market movements will hit your nerves, however you must learn to keep greed, hope and fear aside, don't let emotions govern your decision, but let logic do.
9. Sticking To Plan. Trading successfully, you must learn to act fast and not thinking fast, reason being if you develop a strategy, it's important to follow up with that strategy and not chase profits. Follow your formular closely and don't allow emotions get in the way, and making you to abandon your strategy. Always remember, Plan your trade and trade your plan.
Very good points! I would also add, as this list is for beginners, that you shouldn't launch yourself into full-time trading rightaway. Give yourself time to learn as much as you can, try yourself in longer timeframe trading - don't go quitting your job until you have enough knowledge and experience to be consistent.
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Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance.
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