How to trade effectively inside the dayBarry Copeland 08 / March / 18 Visitors: 12
By choosing knowledge and the shortest path to regular earnings in the industry, many novice traders are missing a very important stage, without which it is impossible to achieve sustainable income. This is a practice.
As a result of the trader's training in placing orders, determining the volume of transactions, controlling risks, as well as choosing the main strategy to follow, the amount of time spent on studying books/ articles and viewing training materials should be significantly reduced.
After that, the time should be spent on practicing all these skills, so that at the required moment, in the conditions of a rapidly moving market, when a signal appears, they can be applied in a few seconds.
Day trading practice
The main thing that a trader needs to know is how to apply skills in the real market.
In order to improve, one should practice regularly. Studying articles and watching videos here will not give any effect. It is necessary to work through what was studied until it is an integral and natural element of the entire decision-making process in a moving market.
Practice is not just spent time, hours spent near the monitor will not make the investor better. It is possible for a trader to trade for years, but not to make progress, so this activity needs a concrete and balanced approach. For the practice to be effective, something specific needs to be worked out. The trading plan can help in this case. It is a document that accurately describes how, why and at what time a trader should enter and exit positions, how he will manage risks and how much volume his trades will have. The plan should specify which markets and when to trade. The main word here is "specifically". The practice is to follow the plan steadily, so that you can monitor all progress. When positions are based on random factors or under the influence of emotions, the trading results will be unpredictable and fleeting.
Work on a certain account on one element of deitrading at a time, until the selected strategy is not usual for you. For example, you can monitor the graphs and select the entry points for the selected strategy. Do this until you learn to look at all the entry points that your strategy presents. Day trading requires a fast, but balanced response. Work on the ability to select the inputs directly at the moment when it implies a working strategy.
Then move on to the competent placing of stop orders. After that, work out the correct placing of orders at the positions of the target income. All elements of the strategy can be practiced from several weeks to several months. If you become fully confident with the trade inputs, stop orders and the allocation of target income levels, begin to connect the rest of your trading plan. Work out the definition of the optimal transaction volume (it is desirable that the risk in each position does not exceed 1% of your total deposit) and other elements.
This may sound a little strange, but you will learn in parallel what not to do. After all, not only do you try to match your own strategy and take all the positions that it intends to take (if there are suitable conditions and according to the trading plan), but you also learn not to take any action if the strategy does not give a signal.
Trading is not just about the positions that you take, but also about the positions that you do not take. When your strategy does not allow you to trade, do not take any action. Unfortunately, it is often the case that traders do not have this skill. Learn to be patient, but in the same case, act decisively if you get a good opportunity.
How long you will work out all the elements of your own trading plan depends directly on you. Basically, the work on each element takes about 10 20 days. After dealing with one element, add another, and then practice this pair of elements for 10-20 days, and so on.
After about six months, a trader using this approach will have a good understanding of his own trading plan and 120 days of practicing the chosen strategy. Meanwhile, he will know how to trade in the conditions of each market.
In six months an investor will probably have to face incredibly volatile and very calm days, trend and rally periods, growth and decline of the industry. It is not a good idea to practice your skills in a market of the same type. So it is recommended to do this six month practice before risking real money.