Day Trading Strategies – 1


The beginners do not understand the importance and vantages of having a good day trading strategy. Do bear in mind that you will need to work on your own to produce results. Avoid thinking that someone out there, is going to hand out some magical trading tip that will help you to make money. The best trading strategies will have certain interesting features. For a start, they will be robust. Secondly, the trading strategy will be simple to implement. Thirdly, good trading strategies will also come with elements that will reduce your draw downs.

Why should your trading strategy be robust? As mentioned in one of my other posts, the world markets are turning out to be tough to trade with the passage of time. The volatility levels are increasing thanks to all the high frequency trading programs competing with each other. It is important to have access to a trading strategy that is simply water tight and does not leave any room for chances.

Now, why should your trading strategy be simple? Please understand that you will have to implement the strategy everyday. Complicated trading strategies will only end up exhausting your mind and spirit after a couple of days. Follow a complicated trading strategy and you will spend more time trying to keep all the so-called rules in your head. By the time you analyze the rules and come up with a decision, the price would have moved away leaving you no chance to place the trade.

Likewise, good trading strategies should also take into account of the draw downs. You might have to win big in order to keep the spirits flowing. Quite often, I have noticed that large losses will end up shaking the confidence of the traders. They will begin to question their techniques which will eventually lead to their downfall.

Once you have a day trading strategy, take all measures to follow it rigidly. In the midst of the losses, traders will feel like jumping ships. As expected, you will only end up losing money at a rapid pace if you keep on changing the trading strategies every now and then.

Traders must take the time to evaluate their markets. Some of the best day trading strategies that has helped many people to make millions a couple of years back, does not simply work anymore. The market conditions will always keep on changing and you will also have to adapt with it in order to harness the profits.

Regardless of whether the price trends or consolidates, your trading strategy should be able to help. Rarely will you come across trading strategies that will allow someone to make money when the market trends / consolidates.

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