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Well, the appeal of day trading is obvious:
In many ways day trading requires more skills than swing trading: it’s not just about analyzing trends and making predictions, but also about quick decision making, risk management, and maintaining a level of emotional control, which is often overlooked, but very important.To become a good day trader you will need to be able to manage an intricate balance between strategy and instinct a thorough understanding of market nuances, and the ability to adapt rapidly to market changes.Understanding whether day trading is right for you involves really understanding yourself – day trading can be a psychological and emotional rollercoaster, so if you can keep a cool head and stick to your trading plan no matter what is happening in the market, that’s one sign that it’s yours. The best times of day trading are at market open, so can you make yourself available for that time or are you already stretched thin on your current responsibilities?Answering honestly these and more questions will lead you to the right decision.So, let’s go ahead and talk about 5 ways to improve your day trading.
Tip 1You need to understand the importance of round numbers, it doesn’t matter what instrument you’re trading, everyone is focusing on round numbers, like 2000 gold, or 35000 Dow Jones, etc., the trick that you need to know about round numbers is that investors and traders like to test and reject them. This is particularly true for forex traders who like to run for the round numbers, if it is close enough they will test it and likely will break it by 5 or 10 pips. So as a day trader, you can use this information, you can buy and sell based on this idea.
Tip 2Respect market sentimentThe easiest, smoothest, least stressful day traders are the one side of the direction of market sentiment: this is a very simple concept since it’s much easier to do trades with the trend than to fight against it.So, figure out the market sentiment and day trade the same direction, it’s for many traders actually do. Well first thing you should do is to look at the market from a broader perspective (fundamental analysis), to get a sense of where the market is. This will help you with selecting the right trade.
Tip 3Don’t ignore fundamentalsAt least you must understand what data releases and events are in the economic calendar, so it won’t compromise your trades with unexpected price movement.You should look at:
If you want to improve your trading you need to be aware of events on the calendar and understand why there is trend continuation, hesitation, or even possible reversal.
Tip 4Be quick One of the biggest tips for successful trading is to be nimble with your profits. Don’t be greedy, get in and get out. Use the second target if you really want to milk pip for more trades.Traders often enter the trade at one price and then close half of it when it reaches a short – easy to achieve target. Then advanced traders move their stop to breakeven to target a bigger move, and often move their stop up when the price moves in their favor, this is done to lock in even bigger profits.
Tip 5Keep it SimpleStick with one strategy, if you use too many technical indicators and too many strategies you will get stuck in too much contradictory information and as a result will lose money.Keep it simple, use one simple easy to interpret strategy that will help you identify the trend, and find confluences, entry points, stops, and targets.
To concludeDay trading is a popular strategy for making quick profits, but it is important to understand the risks involved before you start trading. By following these five tips, you can improve your chances of success and avoid common mistakes.Remember, day trading is not for everyone. It requires a lot of discipline and hard work, and it is not a get-rich-quick scheme. If you are willing to put in the time and effort, however, day trading can be a rewarding experience.With hard work and dedication, you can achieve your day trading goals.More By This Author:Manulife Financial Stock Technical Analysis And Forecast
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