Image: A professional day
trader sitting at his desk.
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What is day trading?
It is a trading method that utilizes both technical and fundamental
analysis to uncover short term bullish trade or bearish signals in
real times. It aims to profit from short term market cycles without
dwelling too long in the market.
A day trade may last for fifteen minutes up to two hours in normal
Who are day traders?
These are market players that use technical indicators such as the
slow stochastic, Moving Average Convergence Divergence indicator
real times buy or sell trading signals without disregarding the
more advanced short term traders also make use of fractal trading
strategies to forecast the next price move.
Day traders are the most active market participants since they
are constantly placing orders.
More working traders can place more than hundred trades per
day depending on their trading style or account.
There are regular day traders, but also professional traders who
trade for hedge funds, banks, trading firms and big financial
institutions such as J. P. Morgan or Goldman Sachs. Common short
terms traders are less in action than the professionals for the reason
that most are part time short term traders with minuscule trading
Day-traders buy or sell stocks, currency pairs (Forex or FX),
commodities, indices and ETF. As real times market participants, they
spend most of their time looking at their computer screens. A day-trader
can spend at least three hours starring at computers screen when he
or she is trading.
Day trading tools
Most daily traders use mechanical trading systems such as the TSTW 24,
TS CCI PRO or Swing 240. The systems allow them to apply viable
trading strategies without guessing the market.
They also help them to stay focused, disciplined and detached from
all unnecessary emotional
or irrational reactions. Furthermore, they as well rely on
automated trading software such as Track 'n Trade Autopilot.
Though, these trading tools are essential, the most imperative
trading instrument is the trader.
He or she has got to be able to filter out false signals or distortions
and take into consideration the current market environment. A trader
when high impact news such ADP Non-Farm Employment Change or
Non-Farm Employment Change.
Real times traders bring into play various trading strategies depending
on the financial instruments that they are trading. The most
effective strategies are the three channels trading methods which do
not violate the market patterns. Day traders also specialize in a
particular market or financial security. Some do trade stocks while
others only trade Forex or commodities. In addition, there are also
specialists for a single financial instrument such as the Euro-dollar
currency pair, silver or gold.
Day trading pitfalls
a/ The number one pitfall is over trading when a trader becomes too
greedy and exposes more than 5% of his or her trading account.
b/ Lack sufficient trading fund.
c/ Lack of a viable trading plan or strategy.
d/ Constant violation of market patterns.
e/ The use of a single time frame instead of a multiple time frames
finance and Forex factory.
I/ No desire to learn to apply the trading triangle.
j/ Impatience; one never waits for a price candlestick bar to close
before looking for signals or always rushing to place a trade
k/ No viable money management or hedging strategy.
l/ Setting the wrong goal such as making money instead of one
that seeks to trade successfully
like a pro. Indeed, trading like a pro will permit one to profit
from the financial markets.
m/ No attention to London, New York or Hong Kong’s opening bell.
n/ Addiction to be in a trade even if the trade setup is not reliable.
p/ Being a courageous trader instead of a smart trader.
q/ No knowledge of basic market protocols that the professionals follow.
It is essential for beginners to remain composed, and stop blaming
themselves too much for these downfalls. New traders are more
likely to commit these errors without knowing, but it is
indispensable to review all losing trades. If one had a losing trade,
one ought to know what went wrong. Once one identifies the source,
one will now try to rectify it or control it if it arises in the future.
For example if a day trader does not acknowledge the opening bell
and notices that this is one the causes of his or her trading failure,
he or she will learn to be patient or wait at least thirty minutes
after a market is open before pulling the trigger.
It is vital to all active market participants to watch the full length
of each educational day trading tutorial.
These trading tutorials have been carefully prepared to help day
traders who want to boost their trading skills. These are practical
demonstrations with effective day trading strategies that one
can learn and master.
Finally, one ought to understand that it takes time to become an
expert. Therefore, one will engage one step at a time making sure
that one grasps the first level before heading to the next. The
learning curve varies from one trader to another, but nothing
can stop those who want to adopt the mindset of a professional
Image = A day trading picture
showing a day trader analysing
a chart .
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