1) Create a written intraday trading plan. – Without out it you’re cannon fodder for more capable intraday players. You need to know what it really is you’re going to accomplish prior to the session starts, each and every day. Whether you plan to day trade stocks, Emini futures, commodities, or other things, it doesn’t matter. Like, if the program is always to trade momentum or breakout stocks, you will certainly need 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? Do you want to use price targets, trailing stops or some other exit strategy? 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 most of these questions ahead of trading with real cash and really even before to practice on a trading simulator. Which brings me to my next intraday trading tip.
2) Focus on a trading simulator first. – Don’t even think of day trading with real cash until you are becoming consistently profitable on a top-quality trading simulator first. What’s the point in rushing things by checking a day trading account and immediately starting to trade with real cash? 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 plan to execute trades without fear of inevitable losing streaks.
3) Focus on a sufficient account size – For day trading stocks, as a result of SEC’s pattern day trader rule, most brokers will need no less than $30,000 to open a day trading account. intraday trading tips But, you ought to expect a drawdown in your account because you is going to be just starting out and probably is going to be making mistakes. So, in reality, you actually should consider beginning with no less than at least $40,000. This will be money that you or your family do not need to pay for living expenses.
4) A Stop order should be utilized on every trade – No exceptions. That is probably the most important tip I can provide you. Unless your trading plan includes some form of counter-trend or pair trade that enables for multiple entries at different price levels if price moves against your position, you have to always work with a stop. Otherwise, what will happen could be the trade that you intend on only becoming an intraday trade will soon become an investment and you’ll be without some trading capital.
5) Understand and use Position Sizing – One mistake that many novices make is to place each of their trading capital and often much more using margin, on just one trade, stock or strategy. Using the simplest position sizing technique simply requires one to split up your account into several blocks of money to buy or short individual stocks or use the split capital to trade different strategies. Trading with too many shares on a single stock or strategy opens you as much as too much risk from possible losing streaks.
Successful intraday trading tips requires knowing a great deal more than what I’ve presented here, but these five tips are absolutely required for a newcomer to learn before trying to create money in 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 convinced that it’s OK to have a profit regardless of how small, so long as it’s a profit. Wrong! Many, if not most traders generate income by trading strategies or systems that have a win% of 50% or less. Therefore, your average winning trade will have to be substantially bigger than your average losing trade to create a general profit. That is only possible if you are patient enough to let winning trades run.