Posts tagged ‘strategy’

September 25, 2010, 12:52 PM, jason

Day Trading

Day Trading is one of the most exciting activities that provides an amount of opportunity on a day to day basis. It is one of the toughest businesses available with the success rate very low. The reason behind this is the mistakes committed by many traders.
Some of the biggest mistakes traders commit is that they have no trading plan.You should know when or where to enter and exit your position and how much money you can loose if trade goes against you. Risking all of the capital in one trade is also one of the reasons why day traders fail.
This is synonymous to improper money management; do not engage in the high risk low reward home runs type of trades. Beginning traders usually don’t have the patience and discipline when trading, this will not help you achieve success. You must wait for those good set ups before you make your trade. Since the market is not stable, you must not expect that every trade you make will give you profit. You must take full responsibility of your actions and avoid blaming your losses to your broker, computer or trading software. You must stop holding on to losing trades, the market will not always turn around in your favor, accept your losses, learn from it and move on.
Traders commit mistakes now and then that is why it is proper to be aware of the common mistakes committed by other traders in order to be able to avoid them and be the successful day trader you want to be.
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September 19, 2010, 12:46 PM, admin

If you are interested in trading because of the possibility of earning lots of money, you better be prepared to work for it. Learning the
basic principles in day trading, is just the starting point. Research plays a very important role in learning the ins and outs of this profession. Once you have fully understand the basic rules in trading, you must need to practice first to gain experience. There are online sites you  can use to trade without actually using your own money.

Paper trading gives you the opportunity to practice trading, without risking your real money which allows you to test strategies that might be useful on your actual trades. Trading is a full time business with possibilities of profits and losses. You need to nurture a right attitude towards profits and losses. An occasional loss should not prove depressive enough to make you lose your heart altogether and deter you from continuing with your trades.

Joining investment clubs and trading chat rooms will be beneficial to you, it is always good to meet professional day traders,  and learn from their experiences. It is also advisable that you keep a journal to monitor your trades, analyze your profits and learn from your mistakes that led to losses.

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February 24, 2009, 4:43 PM, SHAWN

It is always a good idea to know what an average swing on the stocks you trade. Calculation is very simple and gives you a good risk/reward ratio trades.

Study the last couple months on the stocks and write down how much a stock rallies before continuing its downtrend (from Low to a High) vise versa on an uptrend (from High to a Low) and then add them all up and average it.

You can use this number in 2 ways.

1) if you are in a trade and want to stay with the move, use a trailing stop little more then the average. (if your average swing is .35 use .40 or .45 as a trailing stop)
2) You can use it as an entry in a trending day. On an uptrend you can get long on a pullback when market gets close to your average and use a tight stop. ( if your average swing is .35 you can get long .30 pullback and risk .10 or .15. This is a high risk/reward ratio trade. You may be able to catch the next leg up.

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