Safer Day Trading Strategies

A few introductory cautionary remarks

Given the recent advances in technology and the speed of communications, day trading has erroneously returned to the forefront of people’s minds as a simple but greatly profitable business that is easy to engage in and understand. Without thinking about their mode of entry into day trading, their preferred (if any) day trading strategies, their stop-loss margins and their approach to an elegant exit from the scene, many have jumped into day trading and lost. Viewing it as an enjoyable pastime that can be engaged in from home at any time as a side project is the path to serious financial and emotional stress. Day trading is not simple and it is not a foolproof and failure-proof lottery – as any experienced day trader would tell you, it is hard work that takes a while to master and can be unpredictable even for the veterans in the field.

What are the most important qualities in a day trader?

Some people who are rather distant from actual day trading like to boast about using their top-notch day trading strategies to make ‘quick and easy kills’. Experienced professionals would tell you plainly there is no such thing. No amount of training and strategy would get one anywhere if that person lacks a number of fundamental characteristics: patience, the ability to fully focus on business, and having good control over their emotions. Without these three, your day trading days would be few. This sphere is inviting and attractive, but it is only a rich field of work for those that are persistent, calm and concentrated on the matter at hand.

DayTrading

Do experienced day traders win big every day?

Taking these characteristics into account, one needs to keep in mind a simple truth: even having all of them and perfecting your personal day trading strategies month after month and year after year does not give you any guarantees. Professionals may lose big when they had hoped to make a good profit. Many factors may play into this, such as personal issues, a mild sickness, losing your full concentration as a result of a recent big win etc. Thus, if you are expecting to attain a level of comfort in day trading that would allow you to sit back and relax, look elsewhere.

What are some safe day trading strategies?

When talking about ‘safe’ day trading strategies, it is important to keep in mind, as with the previous point, that nothing gives 100 per cent assurance of a victorious outcome. There are, however, a few pointers that can make your day trading experience safer and more enjoyable. For example, while it is important to focus on day trading when you are engaged in it, it is equally important to understand that you do not have to (and actually should not) engage in day trading every day. Another good day trading strategy that has been often mentioned by even the most experienced professionals in the field is always keeping your personal discipline and adherence to previously thought-through plans at the highest possible level.

Fluctuations in the market, losses and wins, urgent and unexpected news, the behavior and on-the-spot advice of those around you – all of these factors should play no role whatsoever in the way that you go through your day of trading. If you set your margins of loss and desired profit in advance, you should follow through with these margins, no matter what. Another important point that many experienced traders make is that those only entering day trading should do so with extreme caution and not attempt to trade in markets that are completely unsuitable for them, such as crude oil, oats, lumber, gold, wheat, and FOREX markets with little liquidity.

A few more things to remember

There are many ways to enter the day trading market. For example, B.C. Lund lists several methods of starting to put these day trading strategies to use even when you cannot afford to put more than 25 thousand dollars on the table. Whatever approach you choose, you need to be alert, focused, calm and open to the possibility that your first few (dozen) attempts at day trading would not be profitable. If you persevere and use the pointers mentioned earlier, you may find a new home.

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