Developing Your Day Trading Strategy
Importance of a Day Trading Strategy
Are you going to school? You’ll need a strategy for selection of courses that meet your education and career goals. Taking a trip? You’ll definitely need a roadmap (or today a GPS) to ensure you arrive at your anticipated destination.
Day trading requires a strategy for investors as well. Without a plan and roadmap for investing a day trader can be charging blindly into the world of investing resulting in a short-lived financial career. Regardless of the individual markets you expect to participate in there are a few key strategic guidelines that apply to day traders in general:
Controlling your capital – determine how much you plan to invest and set a limit for yourself on the amount to be advanced on a single trade. This will protect your account balance through limiting exposure and risk from one investment. Many experienced and successful traders limit this to no more than one or two percent of their account balance.
Entry and exit points – monitor investments that seem attractive to you and determine what your buy (entry) and sell (exit) prices will be. Once you’ve set those values stick to them. Remember that there was logic behind how you set those prices, so don’t allow emotions or fears to change those points.
Analytical skills – learn to read at least some basic stock charts so that they are meaningful for your regular use. There are many real-time charts and stock tickers that will help you track indexes and market trends. Entire books and web sites are dedicated to various analysis tools of use to day traders.
Test before you invest – many brokers and online brokers provide software tools that allow you to simulate trades without investing real capital. Doing simulations utilizing your strategy will help you determine its effectiveness and success rate. Fine-tune your strategy to the point you feel comfortable opening a real account with real money.
Invest in what you know – many experienced investors offer guidance to participate in companies or products you have some level of familiarity with. If you have knowledge of software and technology you would have a good edge in understanding a tech sector company’s strategy and earnings potential.
Stick with your strategy – once you’ve observed what works (and what does not) you can fine-tune your direction as you acquire experience. Don’t vary significantly from the strategic pattern that works for you.
Study and observe the market – use news feeds and company announcements wisely to identify markets or businesses that are great opportunities for buy actions, and also for warnings or indications that it’s time to sell.
Evaluate – constantly review your pattern of gains and losses. What were the conditions that resulted in the gains? Were the losses caused by bad choices, market conditions, or perhaps lack of research or knowledge related to the investment that you could have known? Use your own evaluations to help fine-tune your strategy for future success.
Putting Your Day Trading Strategy to Work
Strategy is important in many aspects of life, including day trading. Applying your strategy to your investment endeavors will provide focus and reduce impulse trades that may be contrary to your financial goals. Emotions and investments definitely do not play well together. Once your strategy has been established and proven you’re on the right course for day trading success.
SureTrader is a leading online broker with the tools you need to stay on track with your investment strategy and goals. Using market charts and news feeds to determine the investments that align with your strategy will help guide you toward the trades that will enable your financial success. Stock tickers available with real-time market information keep SureTrader clients aware of changing indexes that can impact your investment decisions. Clients can also analyze stock activities and trends providing an advantage over other online brokers. SureTrader’s friendly and courteous support is available to our clients on a 24×7 basis to answer any questions and resolve problems. Information from multiple exchanges n national and global markets enables you to make the right investment choices that align with your individual financial strategy.
SureTrader’s unmatched speed in execution of your trades ensures that you accomplish the timing you expect giving you a competitive advantage. Desktop and mobile applications ensure timely and flexible access to SureTrader services – iOS and Android platforms are each supported. SureTrader’s global services enable quick and easy trades even in after-hours trading.
Contact SureTrader right away to get started doing online trading with the best in online brokers.
Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.