Prepare for trading day like a professional
Plan out your trades before you execute them. To begin, you should prepare yourself for a day of ‘trading as an expert.’ Financial instruments are included in the preparation, along with best entry strategies and management of trades. Day traders cannot enter into trades without reviewing the economic news. It is essential to understand when to expect economic updates before entering a trading transaction. Only the careless among traders disregard economic reports. Yahoo/finance is a good source for economic information, as are Google/finance and MSN/money. You will then use fundamentals and technical analysis to decide whether you want to trade, continue reading here.
The London market opens at 3 am Eastern Time, 8 am London time and New York is open at 9:30 AM Eastern Time (14:30 London time). A bell will ring before trades are made. You can trade with ease on your first day by following eight simple steps.
First step after day trading preparation: 5% rule
The day-trading market is not free of risk. There are risks in every trading decision. Investors are advised to safeguard their trading capital. For managing your money, and controlling risks, no more than 5% of your trading account may be used. The maximum amount you can spend on each trade, though not more than 5% of the total account balance, is five dollars. There is no need for more trading once you hit $5.
Day 2 Trade like a pro
The Asian and London sessions are also popular trading times for most traders. Many traders will work through the night, without a break. This scenario is characterized by excessive trading. Every trade has to be reimbursed by the broker as commissions. Avoiding overpaying for commissions requires that you limit your trades. In order to ensure traders don’t take on trades for their own amusement, they need to ask “Is the trade worth taking?” You should ensure the expected reward is at least twice as high as the potential risk. The risk/reward relationship should be considered before any investment.