Bear in mind all the time that when it comes to day trading, you have to plan your trade and trade the plans that you have. It has been said that the very first step that you have to take if you want to trade the same way professionals do is to prepare for it. You have to be ready at all times. When preparing, you have to include the following factors: money management, risks control, trade management, the strategies of the best entry point as well as the financial instruments that you have to use when trading. If you do not want to end up wasting your investment, you have to first check the economic news, the same way serious day traders do. It is vital and essential for you to know the time as well as a day of every single important economic news prior to you thinking about entering a day trade. The only people who disregard the importance of economic news are careless traders. If you do not want to be categorized under them, then you must consider it first. There are so many ways on how you can check economic news like MSN/Money, Google/Finance, and Yahoo/Finance as well. Once you have checked the economic news, and it is stated there that it is the right time to enter a day trade, then you can do so. When deciding to day trade, make sure that you also base your decision on technical or fundamental analysis.
If you become a day trader or if you are already a day trader, make sure that you respect the opening bell of different time zones as they dictate the right time to do day trading. You have will have to wait for the opening bell before you proceed on placing any day trades, that is if you do not want to regret your decision. Once you are done with the preparation, you may proceed with following the steps to do day trading the same way professionals do.
The very first thing that you have to do right after doing the trading preparation is to follow the five percent rule. It is very important for you to understand at an early stage that day trading, the same as any other investment, involves risks. There is no such thing as day trading without risks. There is also no such thing as a trading decision that is risk-free. Every trading decision will contain some elements of risks, and because of this, you have to protect your trading capital at all costs. One very simple and basic rule of money management and risk control is to use only 5{61184866ff15cdb405c52590996984f5dcc9333127d40f009c80f9c52d0a6265} of your trading account. What we are trying to say here is that when you open five trades at the same time, the sum of money allocated to each one of them will not exceed five percent of your trading account. Upon reaching five cents, you don’t place trades anymore.
The next thing that you have to do if you want to trade like a professional is to consider your expected reward. Most of the time, traders have the habit of trading during different sessions. This means that they are losing a good night’s sleep because they are trading without a pause. The primary concern about this habit is that they over trade. This is not good at all. When trading, you have to make sure that your expected reward is far greater than the risk. Hence, you have to discern if what you are trading for is really the right one.