5 Trading Tips for New and Active Day Traders

You’ve probably heard about how 90% of traders lose money. The actual statistical range is anyone’s guess. To know with some certainty, a study would need to be carried out. It’s doubtful that a broker or other type of firm would want to go on the record admitting that their customers are unsuccessful with the markets. Further, there is little motivation for someone to voluntarily complete a survey about personal financial matters.

E-mini S&P 500 (ES) 5-Min Chart
Confirming Trading Signals

Some traders like to use multiple strategies together to “confirm” the direction of the market. The idea is that multiple systems that say the same thing may indicate a greater chance the market will move in the anticipated direction. Here is a screenshot of an E-mini S&P 500 chart that illustrates this idea. The trade that was “confirmed” by two nearby signals (Atlas Line and ATO 2 long signals) was good. The Atlas Line short trade earlier in the day was good. The market soon turned against the ATO 2 trade that occurred in the middle. See our products page to learn more about trading strategies that may compliment your existing approach.

Are we in the dark in terms of understanding how many people are truly successful? Considering the following. From the various day trading courses and software out there, we can see there is definitely interest (and business) in fulfilling a need to help people trade better. We can reasonably conclude that day trading must involve some level of difficulty that exceeds the skill of most people. Otherwise, most day traders would, in short order, figure out how the markets work and trade them profitably. There would likely be far fewer trading businesses, as self-taught traders would have little need to look elsewhere. If trading was easy, we would see it become a much more popular career or income option. Obviously, this is not the case.

Therefore, trading is not easy and education should be sought. Aside from the problem of maintaining profitability, aspiring traders must climb a rather steep learning curve.

In no particular order, a successful trader needs:

1. Basic computer and operating system proficiency
2. A basic understanding of trading terminology
3. An understanding of how to use a trading platform
4. A way to practice trading (including time set aside to learn)
5. An effective trading strategy (or strategies) to use

At DayTradeToWin.com, we service all five components. From what we have seen over the years, most other day trading companies focus mainly on the fifth. Yes, we do answer basic computer questions that we get from our clients. Many of our clients from a Mac background and need some help getting familiar with Windows. Yes, it is up to you to make sure you have enough time in your life/schedule to practice. However, we help provide you with the tools you need to practice with real-time market conditions. Our free educational videos cover terminology, free methods, and general platform use. Our products are designed to help you get to the ultimate goal of finding consistent success. Remember that we cannot provide guarantees. We do not have a crystal ball. The markets can and will do the exact opposite of what is expected. As such, people who try to sell you trading methods with guarantees may not have your best interests in mind.

To help you further, based on a bit of research and our own experiences, we’ve assembled a top 5 list of considerations to improve your trading (in no particular order):

1. Successful trading = proper money management and proper risk management. Don’t trade with rent or food money. Trade based on what real-time market conditions can reasonably provide. If the market is slow, do not expect that big winning trade. Similarly, if the market is fast, that small (lower risk) stop loss may get you out prematurely when staying in for a few more minutes may have produced a profit.

2. Does your trading strategy fit your personality? When people ask us to recommend the Atlas Line, ATO 2, Trade Scalper, or Mentorship, we tend to describe how each one behaves. Some people would rather go for fewer, larger trades than watch a 1-min chart for many trades. In that case, the Atlas Line may be a better fit than the Trade Scalper. Other people like the control the Trade Scalper provides for each trade because of the smaller profit targets and stop losses.

3. Psychology is a real factor. Do not let your ego or feelings dictate your trading. Trying to win back losses can put you in an even worse situation. Instead, it may be better to stop trading for the day and continue the next with a clearer head. Had a bunch of success in the markets today? Congratulations, but don’t get greedy. You can lose it all and more if you don’t know when to call it quits. Follow the rules of the trading strategy, not your impulses. Approach each new potential trade with the same amount of discretion. Have realistic goals and define your limits. Be rational.

4. Markets are unpredictable. If they were predictable, you would probably not be the first to figure it all out. Expect losses to occur, no matter how good you think your strategy is. Always have a reasonable profit target and stop loss ready to go. Be patient. Just because you missed an opportunity does not mean you should jump

5. Practice, practice, practice. You need to practice with real-time market conditions. NinjaTrader makes this type of practice really accessible, which is one of the reasons we like the platform. Avoid referencing historical data to say, “Yeah, I would have done that. I’ve got a winning approach here.” Use your platform’s performance record tools and/or keep a trading journal. Write what works for you and what doesn’t. Develop your own sense of judgement to complement the strategy that you are using.

Have questions about anything in this article or trading in general? Email us at [email protected] for assistance.

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