Day trading is something that many traders are willing to try, especially those who are eager to encounter some action and put their skills to quick tests. Now, it won’t be as good and as profit-making as you think if you don’t know the “rules” that many day traders follow. You have to read more Online Trading Review and be disciplined and determined to follow these rules if you plan to succeed. We’ve listed some Online Trading Tips that you should follow to make more money.
Enter, Exit, Escape
This is imperative if you don’t want to unnecessarily risk your investments. Before you enter, you should envision your course of action. You must know when to exit, or when to escape. Carefully plot your next actions and visualize the worst case scenario. Know what you need to do if the tide goes against you. You should never ever play it by ear.
Limit Orders Beat Market Orders
Don’t choose market orders over limit orders. Let’s try to compare them. A market order instructs your broker to buy or sell at the best available price. You should remember that the “best” is often not the most profitable. For instance, during the May 2010 “flash crash,” when the market orders came to effect that day, a huge number of sell orders were filled at 10-, 15-, or 20 points lower than expected. A limit order, meanwhile, enables you to control the maximum price you will pay and the minimum price you will sell. Thus, you have more power over your trades if you choose limit order.
Avoid Margin If You Are A Beginner
If you’re still a beginner, no matter how attractive it sounds, try to avoid using margins. Using margin means you borrow money from your broker in order to pay for all or a part of your trade. Of course, if you know how to properly use it, and if the odds are in your favor, margin can increase your potential returns. The drawback is if your trade bites you, your margin will also amplify the damage you take. Therefore, if you’re just starting out, learn first how to day trade without the use of margin.
Don’t Act Upon Unfounded Tips
If you enter the mind of a professional trader, you’ll find out that they don’t act upon uninformed tips and news. Because if you do so, your trades will most likely go down the drain. Don’t settle for knowing what to buy. Figure out when to sell, too. You’ll find out that the tipster has already fled. Jesse Livermore, one trading titan, said, “I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment.”
When it comes to day trading, the most important thing to remember is to learn to trust your judgment. And in order to do that, you have to refine your analysis. Learn more every day from trading and learn from other legendary traders. Make sure that you know what you want to do. Remember these rules and tips. Your success awaits you.