Anybody who wants to learn day trading wants to follow certain principles. I won’t say rules because a lot of folks don’t like the word, but guidelines. Some of them are quite well known and some of them are less so, but they’re all urgent to the successful stock trader. I call them the four major elements trading.
1. The Buck Stops With You
Whether or not you are looking about for a day trading system or developing your own, remember that whatever you do is your responsibility. Ask for recommendation and help by all means, but don’t believe everything you hear. Everybody is different and their trading styles can change very, so never follow advice blindly.
Equally, you should buy in a system but do not neglect to test it. Even if the guy who designed it is saying that it’ll multiply your money by two in two months for certain sure, you must test, because there are three possible Problems with that. One, he could be lying. 2, perhaps it used to work well but it does not work any more. Three, perhaps it works for him but for some peculiar reason to do with your spread or whatever, it does not work for you. Your money is your responsibility and yours alone, so put the system to work on a demo account till you are sure.
2. Stay Calm
The largest enemy of any trader is his or her own feelings and this is especially true for the individual that wants to learn day trading. If you are the sort of person who makes bad calls under stress, you might want to think again about choosing day trading as your strategy. This is a fast moving world where seconds can count in thousands of bucks, so you must keep a particularly cool head.
Now pretty much everyone likes to think they are a calm sort of person who would react well under pressure, so even if you’re convinced you are going to be the planet’s number one ice cold trader, test yourself as well as your system in that demo account. If you curve off the system even once or start altering your position size, closing out early, waiting too long etc in demo mode, sorry but you aren’t prepared for real life trading when things will be much more hairy. Work on it.