Wondering how much to invest in stocks? When you read a number of articles on the web, you will notice the answers you find are somewhat convoluted What are trade alerts? Trade alerts provide the active trader or investor an alert when a specific event occurs. Trading alerts are a basic componen Day trading or swing trading that is the question. If you are an active trader, day trading and swing trading will feel like second cousins. How many of you have heard of a live day trading room?
Have you ever been in one before? I have subscribed to approximately 3 trading rooms over my It took close to 19 months for me to realize that I made the majority of my gains between 9: I spent countless hours trying all t Trading with margin is the basic idea that you are trading with more cash than you have on hand. The key with margin is learning to manage your risk e In this article, I will cover two basic trading strategies you can utilize during the market open. In this article, we will cover one of the most popular oscillators — the relative strength index RSI.
You have probably read a number of general Day Trading Game Day Trading is by far the hardest form of trading. This is due to the speed at which a trader must make decisions.
In day trading, t It will be important to understand a few key elements before we dive into the specific strategies; such as volume, volatility, and risk tolerance. A picture is worth a thousand words and nothing will wake you up quite like a morning gap! The gap has the amazing ability of taking the breath rig Taking Profits - Definition When you start out in the trading game, you often will hear a number of pearls of wisdom.
Keep your losses small, let your Think of your account as if it were a boat. Now think of liquidity as being a stream. When day trading, you need to make sure that your boat can alway There are a number of day trading styles that make money in the market. This article provides an overview of multiple day trading strategies that pr In this article, we will explore the topic of trading multiple time frames and how not to overwhelm yourself in this multi-dimensional view.
Ask a traders if they can send you a copy of their trading plan and I guarantee you it will be the highest rejection level event of your life. A day trading journal is the only part of your trading arsenal required to succeed at active trading. Your journal contains each trading transaction Momentum Trading Momentum traders are truly a unique group of individuals. Unlike other traders or analysts who dissect a company's financial stateme We have discussed numerous trading strategies on the Tradingsim blog.
From the very basic, to the ultra-complicated. Today we are going to cover on Understanding Specific Time Zones during the Trading Day Having a successful trading career not only depends on the trading system or style that you u Unlike business owners who generally have a business plan in order to provide a strategic vision to employees and to stay focus on their primary line of business; most traders never take the time to create a business, a.
There are already a million articles on the web about trading plans, but what separates this article from the rest is I will show you how to create a trading plan in less than 10 minutes by answering a series of simple questions. This survey is for active traders; however, the same principles can be applied to any trading time frame. In most line of businesses, time is the main driver for evaluating performance.
Well how long should you wait to evaluate your trading performance …yearly, monthly, daily? The answer to this question is very simple. Base your evaluation period on the number of trades placed and not by the amount of time passed. Time is irrelevant in the world of trading. Trading is one of the few areas in this realm, where the space-time continuum are of no relevance. The way to address the tracking of your performance is to create a set number of trades that you will evaluate against key performance metrics, which we will touch upon next.
You will need to identify the right number of trades for you to evaluate, but this number needs to be high enough that you have a decent sample set, but low enough where it prevents you from going on a destructive trading binge. For me that number is 10 trades. This applies to both my swing trading and day trading activities. On average, it will take me approximately 3 months to place 10 swing trades and about 4 days to place 10 day trades.
I only mention the time element so you can see how long it takes me to place that number of trades based on my trading style , but you can easily perform the same math in your head. I use the KISS method or keep it simple stupid for those new to the term for measuring my trading performance. This is a ratio of your profitable trades divided by your losing trades. This essentially translates to the fact I profit three times more than I lose. You will want to measure R over every cycle.
There is no set minimum or maximum R value; however, you will want to track your performance over time and quickly identify when you are below your historical average. For me, I trade from 9: Any trade activity occurring before or after this zone, I am purely a spectator on the sideline. Similar to the times of day you will trade; keep your trading edge down to one or two setups when starting out. The more strategies you hope to master, the more difficult it will become to consistently make money in the market.
Develop a standard methodology for identifying plays. You will have to first ask yourself the question, what is my time horizon for this trade? Day traders will want to focus on stocks in the news , while long-term traders will want to focus on stocks that are developing new business models that show the potential for multi-year growth. Whatever your trading style, make sure you identify the plays that have the highest odds of profitability.
For day traders, you will want to focus on the market movers. This provides you the greatest opportunity for locating stocks that are trending hard with high liquidity. Within Tradingsim , our market movers component provides you the top list of gainers and losers in real-time.
Once you have found a stock you like, you will need to add the stock to your watch list, so you can keep an eye on the security. Stop losses are not a negative thing; stop losses are what keep you in business over the long haul.
The point here is just to make sure you have a stop loss. If you find your stop is consistently being hit, then you need to take a deeper look into the volatility of the stocks you are trading. Well, once you figure out what that means please let me know.
The greed in you will prevent you from closing your winning trades, even after you hear that little voice in your head tell you the run has come to an end.
The way to avoid this scenario is to have a clear exit strategy. Again, keep it simple. The exit strategy should be as simple as when the stock crosses below a moving average or the VWAP. Without money management , you will not stand a chance of making it in the business of trading. For me, the amount of money I can use per trade largely depends on how well I am performing. If I am going through a rough patch and my key performance indicators are down, then I use less money to minimize the damage to my account balance.
This is something you will not see in other trading plans on the web. When will you take a break from trading? Sounds like a no brainer, but you will be surprised how many traders I talk to that never take breaks. Whether the trader has just had the best series of trades or an all-out massacre of their account, the vast majority of traders just keep placing trades, day after day.
I take a break after I have placed trades. I will take a day off just to give myself time to relax and reflect on my trading activity. Very true, but taking a self-imposed break goes back to discipline and exercising my control of the market.
The major exchanges and prop firms think in terms of limit up and limit down. For prop firms, their risk management rules will closely monitor how much a trader is up or down for the day. Once a trader reaches a particular extreme based on their past trading performance, this trader is not allowed to place any additional trades for the day. Conversely, if I make 7. Now that we have covered the 10 inputs of a trading plan, below is a sample day trading plan you for your review.
While this is a trading plan for day trading, you can simple change the parameters and apply them to any trading period for success. Beach Photo by Trish Hartmann.
Performance Metrics by Alan O'Rourke. Welcome to the Tradingsim Day Trading Strategies home page, where you can find over 90 trading strategies.More...