1) Create a published intraday trading plan. – Without out it you’re cannon fodder for more experienced intraday players. You have to know just what it is you’re going to accomplish before the session starts, each and every day. Whether you want to day trade stocks, Emini futures, commodities, or other things, it doesn’t matter. For example, if the master plan is to trade momentum or breakout stocks, you will certainly have to know just how you will scan for or locate those stocks to trade. How do you want to enter trades? Market orders, limit orders, buy-stops? How do you want to exit trades? Are you going to use price targets, trailing stops or various other exit strategies? Will your trading plan primarily use price indicators/oscillators or do you want to use pure price action to initiate your trade entries and exits? You should know answers to many of these questions ahead of trading with a real income and really even before to practice on a trading simulator. Which brings me to my next intraday trading tip.
2) Begin with a trading simulator first. – Don’t even think of day trading with a real income until you have become consistently profitable on a top-quality trading simulator first. What’s the point in rushing things by opening each day trading account and immediately beginning to trade with a real income? That’s what fools do. Keep your trading capital safe, by trading with sim dollars until you have good, consistent results from the simulator and enough confidence in your trading intend to execute trades without concern with inevitable losing streaks.
3) Begin with an adequate account size – For day trading stocks, due to the SEC’s pattern day trader rule, most brokers will demand at least $30,000 to open each day trading account. But, you need to expect a draw down in your account, as you are going to be just beginning and most likely is going to be making mistakes. So, the truth is you truly must look into starting with at the least at least $40,000. This should be money that you or your family does not require to pay living expenses.
4) A Stop order should be utilized on every trade – No exceptions. That is probably the most crucial tip I can give you. Unless your trading plan includes some type of counter-trend or pair trade that enables for multiple entries at different price levels if price moves against your position, you need to always work with a stop. Otherwise, what will happen could be the trade that you intend on only being an intraday trade is going to soon become an investment and you will be without some trading capital.
5) Understand and use Position Sizing – One mistake that lots of novices make is to put all their trading capital and often much more using margin, on just one trade, stock, or strategy. intraday trading tips Utilizing the most elementary position sizing technique simply requires you to split your account into several blocks of money to buy or short individual stocks or utilize the split capital to trade different strategies. Trading with way too many shares on one single stock or strategy opens you up to too much risk from possible losing streaks.
Successful intraday trading tips require knowing far more than what I’ve presented here, but these five tips are absolutely essential for a newcomer to know before trying to produce profit the shark-infested waters of today’s markets. I’d like to make you with one last bit of day trading advice, don’t take profits too soon. Another huge mistake that novices make, is thinking that it’s OK to have a profit no matter how small, as long as it’s a profit. Wrong! Many, or even most traders generate income by trading strategies or systems which have a win% of 50% or less. Therefore, your average winning trade is going to need to be substantially larger than your average losing trade to produce a standard profit. That is only possible if you should be patient enough to let winning trades run.