Day Trading Rules:
- Day Trading is Not an Investment: First Rule. Day Trading is not an investment. Day Trading is a short-term activity that seeks to profit from price fluctuations in one day. Day Trading comes with many risks. Day Trading comes with risks such as volatility, where currency fluctuations can be rapid and unpredictable. While this can be beneficial if it is used with care, it can also prove to be costly if positions are opened without proper analysis and money management.
- Day Trading Rules: You must plan your trading carefully. This will help you trade more efficiently. You can use the 5W or 1H strategies to help you decide where to start.
- Start by observing the Market for the First 15 Minutes. Usually, the market session begins with high volatility. This can make it difficult to analyze, especially for Price Action traders. This DayTrading rule states that you should wait for the market sentiment to determine its attitude before looking for opportunities. After 15 minutes, you can then start looking for trading opportunities based upon a predetermined trading setup. Technical analysis is a better way to find good opportunities.
- Review Every Trade and End All Trading: This Day Trading Rule is often ignored by novice traders, despite the many benefits. Every trading session has its lessons. Always take the time to reflect on the successes and failures of each trading session after it is over.
- Use Stop Loss These are the next steps to follow when using Stop Loss. In critical situations, Stop Loss is a lifesaver. This means that trading without Stop Loss must be avoided.
- Choose the Best Trading Strategy: Selective will help you to follow the DayTrading rules. You should always have strong reasons to choose a market you want to enter and avoid others.
- Be able to control your emotions and not be too ambitious to chase the market: The ninth day trading rule is to be able to manage your emotions when you enter the trading market. Do not rush to enter a market that appears less friendly or is not consistent with your analysis. The market is unpredictable and cannot be managed by anyone. This means that you can’t control the market to do what you want.
- You might not expect to make a profit every day. If profits are not forthcoming or you have a day without any profit (or minus), it is important to gracefully accept the loss. This is the most important rule.