Image = a white male
professional day trader
in front of his trading desk
A day trader is distinct from a swing trader or an investor. He or she is a
speculative trader who intends to settle any trades at the exchange close.
At the end of this work, one will realize who is a day trader.
Day trader: mindset
What makes a day trader is his or her mindset. As an intense financial market
professional, a day trader could not bear to fail consistently. Certainly, a regular
day trader can take numerous trades within sixty minutes.
Besides, a super-active professional day trader may need more than a hundred
trades per day provided that he or she trades a broad collection of financial
instruments. Despite the hurdle of maintaining multiple trades, the bottom line
is to deliver steady lucrative trades.
In addition, a day trader also diligently lessens losses.
Although, losing trades are inevitable, a day trader will persistently keep losses
to a minimum. The foremost objective in this circumstance is to dodge large
losses or cap every loss to a miniscule. Surely, there are two elements that
could undermine a day trader: consistent plus significant losses. A day trader
ought not to miss consistently, and accumulate extraordinary losses.
Day trader: constant return
To obtain regular successful trades, a trained day trader spends a lengthy time
preparing himself for the opening bell. Consequently, that enables him to promptly
recognize instant high probability trade setups. Such a thing further serves to produce
robust day trading strategies or tactics.
For instance, a day trader can devise both bullish plus bearish watch lists after
screening for stocks or other financial securities that match his chosen trade setups.
This one understands the present setups. Above all, he can trade them flawlessly.
He grasps the setups, signals and risks.
Consequently, it is fair to state that a day trader is also a specialist trader. He has a
laser focus during challenging trading circumstances.
By the same token, a day trader would not realize unswerving successful trades
if he or she had no plan, but wandered without a definite purpose. Clearly, one
could relate a day trader to a hunter or cat. Like a cat, this one is still, patient yet
on guard. He neither keeps his eyes off the ball nor blunders targets repeatedly.
Day trader: tiny losses
To live up to the second goal or retain losses to a minimum, professional day traders
strive to trim losses before all turn huge. That approach encourages them to remain
disciplined at the same time stay away from wiping out their trading account.
Guarantee stop loss shields every trade. A flexible stop loss is always in place at
the origin of each trade.
Though, the final intention is to gain money, professional day traders concede that
people will not obtain it whenever they are losing quantitatively and qualitatively.
Both the extent and number of losses should stay minuscule. Professional day
traders also use the five per cent money management rules to stay afloat.
Day trader: time control
To satisfy their fundamental goals, day traders exclusively trade the most
favourable times when London, New York or Hong Kong stock markets open.
Those people prioritize the initial three hours at any time financial markets reopen.
The objective is to day trade during the most favourable period when financial
markets are liquid plus to avoid illiquid assets.
Therefore, an agile day trader would regularly skip the gap periods just as
many risky day trade setups appear.
Day trader: the opening bell
London begins at 8AM London time, New York at 9.30AM Eastern time and
Hong Kong at 2AM London time. At the moment that a market starts,
professional Forex or stock day traders traditionally pause for thirty minutes
before setting a trade. The idling time permits them to examine the first
thirty-minute price action, yet also to bypass daily brokerage firms' orders.
At Times, it is preferable to set the first Forex trade an hour or hour and half
after London opens to keep away from Euro zone's economic news that could
undermine early trades.
In fact it is a common day trading error if one neglects the opening bell or hurry
to put a trade without scrutinizing the first reactions.
Countless average day traders often endure substantial losses during the first hour.
It is commendable to evaluate each first order before reaching a conclusion.
Day trader: trading drill
To produce steady profitable trades, a day trader ought to time the market precisely.
It is paramount for beginners to acquire an impeccable skill in market timing.
Furthermore, whenever a day trader pay for a bullish stock yet did not order it at
the appropriate point he or she may fail if price swings before trending. Really, a
day trader does not have unlimited scope for variations, hence a perfect timing
will impact every outcome.
Admittedly, a professional day trader adopts a top-down trading method (or trading
drill) to plan an ideal entry point.
View the video
An example of a top down trading method.
Title: Four-hour chart day trading
Author of this article = George Beaulieu
Like a lion which does not have its sights off its game so does a day trader hold his
eyes on the price without blinking.
A top down day trading system (or multiple time frames day trading method) consists
of picking a high probability trade setup on a precise leading time frame before
switching to a distinct signal time span in view of using a lower time frames such as
three, five or ten-minute for a moderate risk entry point.
For example, one may link four-hour, fifteen and three-minute charts or two-day,
two-hour and ten-minute charts.
The intention is to view that bigger picture rather than one short-sighted lower time
Day trader: learning curve
It can take up to four years for a new day trader to master speculative trading. Typically,
brand-new day traders spend few years investigating both the financial markets and technical
analysis. In Fact, that course is part of the beginning step towards readiness.
Not the less, after multiple trials and frustrations, new day traders begin to adhere to each
market pattern, trading drill and triangle. At that time, nearly all acknowledge that the
price is the number one technical indicator. Meanwhile, they also become quite interested
plus keen to study to trade like a pro.
In addition to that passion to trade like pro, new day traders start to abandon worthless
trading tools. Consequently, all start adopting the mindset of a professional day trader.
In the end, nearly all would recognize their handicaps.
Overall, one will unquestionably better day trading gains with the condition that one
begins moving with individual financial markets rather than competing against the
three market patterns. Are you ready become a day trader?