Day Trading Tips - The Do's of Trading

[Dianne Hunt]

Day trading is not an easy job and it takes a lot of time to perfect.
The bad thing is there are no short cuts or quick fixes to it, there
are only solutions. Here are some trading do's that will help you find
the right trading set up that will work for you.
Always set a stop for your trades based on quantifiable information.
Don't put your money at risk because someone said so.
Refrain from becoming a news trader. Don't rely solely on the news
while trading, imagine how much time it takes for the news to reach
you. In fact in almost all cases you should trust the rumor more than
the news.
Position only in those trades that you are familiar with. Never try to
get into a trade that you have no substantial knowledge of. Each trade
has its behavior, know this behavior first before you play with it.
Trading systems may not be consistent in all markets. Match the
trading system with its respective market. What works in the down
market may not work in the up market.
Identify the trend and take advantage of it. Remember that patterns
are always there; only one trend will always be more dominant than the
other. Enter a trade when it is starting to pick up or when it already
has a trend but try to be discretionary in trades that are starting to
lose their positive trends.
It will always be easier for you to enter a losing trade; however, it
is a lot more dangerous than a winning trade.
Always chose the right timing. Compute for probabilities and analyze
the market indicators but don't let analyses paralyze your actions.
News only goes as far as yesterday. It will only tell you things that
have already happened but it's not a good predictor of what is going
to happen. If you read this morning's paper, you are reading history.
As much as possible don't get into the trade late but get out of it
early. These positions are usually the most expensive.
Get out of the trade while everyone else is still in. Don't be the
last person to get out of it.
Go for one big move instead of few moves with very low returns.
If you are losing trades days in a row, maybe all you need is a break.
Try to put it off for a day.
Ride the momentum, if you are winning trades don't stop but don't push
your trades too far or you might lose everything you have won.
There are only two crucial questions in day trading- is the market
going up or is it going down? Answering these questions will give you
a better judgment on what actions to take.
Lastly, if everything else fails, sell.

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