For those interested in Day Trading or even short term and swing trading should keep in mind a few "Rules" and rules are very important in trading and in Life, if we didn't have them chaos and lawlessness would be rampant.
I personally follow and work towards what I have written below, so read on and I hope it helps.
1. Have a trading plan a system a methodology, to put it in simple words "You should know prior to hitting the Buy or Sell button; What is your foundation for buying or selling xys stock, and where do you put Stops and where do you book Profits?" So you should design a Trading System after studying technical analyses, this completely eliminates guesswork and keeps emotions out of the equation.
2. The second step towards building a foundation in Day Trading is to test your system, by testing most people would think of back testing with historical data, Back testing with historical data is Not Enough! You should Forward test your system to see how It would work with random price data. By this you would accomplish knowing the sustainability of your system; you would know the probable number of profitable trades and losing trades.
3. The two points mentioned above are very easy to devise in comparison to my last and final note on Trading, and that is trading your "SYSTEM". All the hard work put into designing and testing your system are of no use if you dont follow the "RULES". There are rules for everything in life office rules, traffic rules, ethical rules etc. and "TRADING RULES", when you sit and watch the screen with the stock ticker showing ups and downs in price movement the real test starts there, the biggest question is will you stick to what you have worked hard for or will you Roll the Dice "HOPING" to make a quick buck....you get it "Roll the Dice".
NOTE: When you get all these three things sorted out "Don’t Paper Trade".....YES you read it correctly don’t paper trade. Trade in the cash segment with less quantity per trade think of the small loss you might incur in testing your system and discipline as tuition fees for TRADING SCHOOL.
I personally follow and work towards what I have written below, so read on and I hope it helps.
1. Have a trading plan a system a methodology, to put it in simple words "You should know prior to hitting the Buy or Sell button; What is your foundation for buying or selling xys stock, and where do you put Stops and where do you book Profits?" So you should design a Trading System after studying technical analyses, this completely eliminates guesswork and keeps emotions out of the equation.
2. The second step towards building a foundation in Day Trading is to test your system, by testing most people would think of back testing with historical data, Back testing with historical data is Not Enough! You should Forward test your system to see how It would work with random price data. By this you would accomplish knowing the sustainability of your system; you would know the probable number of profitable trades and losing trades.
3. The two points mentioned above are very easy to devise in comparison to my last and final note on Trading, and that is trading your "SYSTEM". All the hard work put into designing and testing your system are of no use if you dont follow the "RULES". There are rules for everything in life office rules, traffic rules, ethical rules etc. and "TRADING RULES", when you sit and watch the screen with the stock ticker showing ups and downs in price movement the real test starts there, the biggest question is will you stick to what you have worked hard for or will you Roll the Dice "HOPING" to make a quick buck....you get it "Roll the Dice".
NOTE: When you get all these three things sorted out "Don’t Paper Trade".....YES you read it correctly don’t paper trade. Trade in the cash segment with less quantity per trade think of the small loss you might incur in testing your system and discipline as tuition fees for TRADING SCHOOL.
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