Are you surprised that there are rules for trading? Or maybe you did not know that trading sessions occur during the day and night time? Well, now you know. With these different sessions come their own rules. Here we will focus on the day trading rules due to the advantages they bring.
Before we go ahead, it is essential to note that the "day" sessions are generally understood when a trade is opened and closed on the same day, during the London and New York sessions. So, traders who trade during these sessions must adhere to these sessions' time zones, no matter what part of the world they trade from.
As a rookie trader, you must know the dos and the don'ts of trading if you intend to succeed. Like any successful venture, trading has its own rules, and day trading is even more guarded.
That is, you must learn to play within its confines. Here are some basic Dos and Don’ts to guide you while trading.
DO- Identify Your Strengths As A Trader
Knowing your strengths is such an advantage when you trade. For example, a trader who is not so patient will not hold a trade for more than a day. So if you are this type of trader, you must stick to opening trade and closing it on the same day.
DON’T- Trade without Daily Targets
It is vital to map out your daily targets because it sets the pace for how intense you want your trading to be and how much you intend to make before the close of the day. This will guide your risk appetite and increase your chances of consistency. Still, these targets must aim to be realistic. This is so that you do not shoot yourself on foot or get burned out.
DO-Always Run A Top-Down Analysis
When you start running your market analysis, day traders are known to run their research from the four-hour time frame down to the five-minute time frame. The professionals behind this Pennystocking Silver review stress that this has to do more with the trend of the asset you are trading. It is known that the higher timeframe trend shows the true direction of the market. So you want to do a top-down analysis before you take your entries.
DON’T- Depend on your emotions
Your emotions should never be a factor in how you trade. You may be on a winning streak and decide to go in for more without thoroughly analyzing the market. This can set you up for loss due to the risks associated with trading. On the flip side, it is pertinent that you set emotions aside when you lose. Some traders stay away from the market for a while or, even worse stop trading when they experience some loss. You must learn to be critical in your judgment before you make any decision. Just how to fear limits productivity in everything you do, the same way fear can dampen your trading success.
DO-Know Your Entry And Exit Before Taking Any Trade
Before taking a trade, it is a part of risk management for you to identify your exit and entry. After taking a trade, you may start to look for a good exit point that is risky to your trade. It is just a measure of being proactive towards your trades.
DON’T Exceed Your Budget
Trading can be high for some people, whether they are at a loss or gain. With budgeting, you know your limits, and no matter how you feel on either side of the extremes, you know when to call it a day. At the outset, this may seem a lot challenging for rookie traders who are still awash with the prospects of the market, hence the discipline you must develop to wade through the market.
DO- Dedicate Adequate Time
With day trading, you need a generous amount of time in your hands to catch good trades. You can not trade properly if you are engaged in various ways. You should be able to delegate adequate time to your trades so that you do not accrue losses or miss good entry points. Opportunities can present themselves at no fixed time, so you must monitor any setup you previously analyzed that you are looking to enter or exit.
Conclusively, the discipline required to be imbued with these rules will see you through as a day trader. So, do your research, set aside your budget, and start trading. Keeping these tips in mind will help you make a good profit and keep you away from many trading risks.
