Day Trading - Three Questions to Ask Before You Begin

The one rule that anyone who has even thought about day trading has heard a thousand times is that the market is never wrong, this advice is generally followed by some generic sayings such as the trend is your friend, don't fight the market, and develop your own strategy.

While all of these pieces of advice are relatively useful, it seems many new day traders under emphasize the last point (develop your own strategy) and fail to find a method of trading that matches their personality. In my experience it is the lack of a defined strategy that is the reason that so many fail to find success in the markets. So here are a few basic questions to help beginning traders filter down their options and try to find the strategy that best fits their personality.

Within day trading what is your time period? Seconds? Minutes? The whole day?

When making this decision it is important to ask yourself how you perform best; are you willing to continue holding a position if it begins to move against you or would you rather participate in short bursts and exit at the first sign of reversal? Are you up to the task of making countless instantaneous decisions and synthesizing multiple streams of data? Or would you be better at highlighting particular stocks the night before and then waiting to see if they meet your entry criteria the next day?

How much are you willing to risk and what are you paying in commissions?

Although it is important to find the day trading time frame that is right for you, the fees you pay and your level of capitalization can limit which strategies you can employ as a trader. For example, if you are stuck paying a 5 dollar commission and are only risking 1000 on any given trade that means you will need a 1% return per trade just to break even (10/1000= 1%, 5$ for entry 5$ for exit). Day trading is hard enough but going up against that kind of built in disadvantage makes it near impossible.

What markets and securities are you going to trade?

What markets you decide to trade have a tremendous effect on what type of analysis you will be doing as a day trader. For example the trader who chooses to follow a breadth of large cap securities will be forced to keep up with the news for the entire market whereas a trader who only focuses on securities in a given sector will spend much more time monitoring the catalysts for his or her basket of stocks. However day trading need not be limited only to stocks, with the wide variety of commodity etfs and currency trading brokerages now more than ever investors can focus on asset classes that were not accessible even 5 years ago.

Regardless of what path you choose it is of the utmost importance that your trading style match your personality, because if it doesn't odds are you won't be a trader for long.

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How To Enjoy Your Trading Success

Trading discipline is a fast track to trading success. Disciplined, working strategies will statistically win in the long run. But how should you celebrate your trading success and make the most of your wins?

Day Trading Mentality

Day traders who make a quick profit are the first to celebrate trading success. The small intraday movements in price are enough to keep day traders happy with their positions. The most important thing to remember is even with a comprehensive trading plan, losses are inevitable. Statistically, a win only brings more losses, but the biggest trading secret is that a few wins can easily strike out many small losses.

For day trading with a small account, trading success should send the trader to increase his or her stake. Your trading capital must grow over time to cover your own cost of living, as well as provide a "pay raise" over time. To obtain financial freedom, a day trader must have sufficient capital to both weather losses and collect big gains.

The Biggest Fallacy in Celebration

After a big win, the greatest fallacy a trader enacts is changing his or her trading structure. Too many times, an over-confident day trader makes trades based on "gut" feelings, rather than basic trading fundamentals. However, in this scenario, the trader eliminates strategy, instead entering the gray zone characteristic of gambling. Remember, the difference between gambling and day trading is proper money management. Proven techniques and strategies are profitable in the long run because they have set criteria for each trade, rather than just a stab in the dark based upon "gut" feelings.

The Greatest Gift of Success is Education

Learn from your successes. Indeed, the greatest gift of trading success is the education it presents you. Chances are that you placed the trade because of your own trading system and analysis; review the details surrounding your trade (ideally in the trade journal you keep) to develop a core of strategies that will produce winning trades.

Give Yourself a Brokerage "Present"

Boost your own trading profits by topping your account. Day trading with a small account is very limiting. After a big win, add some of your own personal funds to your account to keep your success. Undercapitalized accounts are the first to falter when the market turns. Investing in yourself can be the difference between profitability or simply getting by.

For large wins, you might even consider quitting your day job. Many people have found financial freedom through day trading. If the time is right and you have bankrolled a significant balance, making day trading or swing trading a career can be both profitable and rewarding. Quitting the 9-5 is the ultimate way to celebrate long-term trading success.

About the Author:

Leroy Rushing is an active, professional day trader; trading coach; and eBook author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide.

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Day Trading Momentum Stocks For Profits

Day trading Momentum Stock traders always search for companies that are moving faster than the market. They buy stocks that are already on their way up with the belief that it will continue to go higher.

Momentum investors do not care about the fundamentals of a company as long as the price continues to go higher. They believe substantial returns can be realized if they find, buy and hold onto those issues while price continues to go up.

These kinds of investors would likely use technical analysis to forecast whether a stock will continue to rise or not. However, one can't just know with a 100% certainty when the rise may be over.

A trader participating in momentum investing will take a long position in an asset, which has shown an upward trending price, or short sell a security that has been in a downtrend. In practice, momentum investing is nothing more than buying stocks that have high returns and selling those that have poor returns. If everybody is thinking that way, rising stocks will keep rising and falling stocks will keep falling. However, this cannot last forever.

In order to earn money from momentum stocks, it is very important to buy and sell at the right time. There are a handful of key factors in successful momentum trading.

One of these factors is the point at which one is willing to enter a trade. Setting specific entry points is important in order to catch the momentum once it has begun. The key to successful trading on momentum is not playing around within the stocks' recent high and low price range.

Setting an entry point above the stock's recent high price or below its recent low price helps one catch bigger, more significant momentum in trades.

By setting an entry point above the stock's most recent high price, one will only begin to trade when the momentum is already going in the direction predicted. In this case, the price is going up.

If, however, there is initial downward momentum, the investor's trade won't trigger, preserving his/her capital for other trades. Setting proper entry points is therefore essential to the success in momentum trading.

In momentum stock, an investor needs to minimize the risk of losing trades by pre-designating a price point at which he/she chooses to exit or stop a trade with a minimal loss.

The use of stop points helps to limit the magnitude of a losing trade, thus, is crucial to the investors' capital preservation. By setting stop losses, investors allow a small movement in price going against them, but cap the amount of negative movement they are willing to absorb. By exiting a trade that is going against them with only a small loss, they are able to preserve their trading capital for future trades.

Stop points also help eliminate emotional trading. As investor, one needs to guard against staying in a trade too long while hoping for a turnaround. Set correctly, a stop loss will allow for small fluctuations in price but protects the investors from more powerful momentum going against them.

There are times when the stock's momentum carries the price beyond the targeted exit price. When this happens, trailing stops is a useful tool, allowing the investor to let profits run while cutting losses at the same time.

Get your Fade the Opening Gaps System and sign up for my free method here at: http://www.daytradeformoney.com.

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Forex Scalping Systems - The Truth About Profit Potential From Day Trading

Forex scalping systems are promoted as a way to make a regular income and build huge profits but none of them deliver profits - why? One simple reason and its enclosed in this article.

Forex scalping - "earn 300 per day", "predict tops and bottoms with pinpoint accuracy", "earn 5,000 a month" etc

Those headlines always make me laugh and you always see a graph that goes up and up but of course when you invest your Investment goes down and you get wiped out. Lets look at first at these track records and why forex scalping systems can never work due to the logic their based on.

Any forex day trading or scalping track record will carry a disclaimer which will be or similar to the following one:

"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".

What use is a track record with this written next to it?

It simply means the track record can be made up and they are don't fall for the hype of the advertising copy, there is no proof of real profits, its all simulated in hindsight and that's not hard.

So why Doesn't Forex scalping work?

Its common sense to anyone really, countless millions of traders all with different aims and motivations and all different make up the market price. It is ridiculous to try and figure out where this group of traders will push prices in just a few hours and this is easy to prove.

Any volatility in short time frames is random by its nature and prices can and do go anywhere. You have no way of getting the odds in your favor and if you can't get the odds in your favor, you will lose - it's as simple as that.

The theory of forex scalping and day trading is fundamentally flawed.

So why do people buy the theory despite the fact the evidence is there for all to see - it makes no money?

Greed and naivety.

Vendors put about a good story, supported by meaningless simulated track records. Its all in the advertising.

The novice forex trader swallows the story, trades and takes a loss and the vendor walks away with a guaranteed profit.

Nice and simple.

Why risk trading your own system ( you will notice no vendor has a real one to support his claims) and why would anyone trust a forex trading system a vendor sells, if they don't trade it themselves?

Leave forex scalping and day trading to the dreamers and the losers and concentrate on trading the odds and looking at longer time frames.

In forex trading you can make big gains - but you need to avoid the myths and profits via forex scalping is one of them.

Concentrate on getting the right forex education.

If you do this you can enjoy currency trading success.

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Best Currency Trading Advice

I'm here to help you get the best currency trading advice that I have to give. I going to help you look at trading as a simple task to make money, rather than this complicated task that makes you feel like you're gambling.

The first thinking pattern you're going to need to learn is that the value of a currency is only useful if it is in contrast with another. Saying the USD = 1.02 means absolutely nothing to you, but USD/CAD = 1.02 does. All I'm trying to say is that you got to always be looking at currencies in pairs. A currency doesn't have a value, only a value with respect to other currencies.

The next thing you're going to have to get past is something we get from our consumer culture; cheap prices. We as consumers are always looking for cheap prices on what we buy. The cheaper it is, the better off we think we are. But this only applies if you plan to buy and use for yourself. In this business you're buying with the intention of selling later. What you'll learn is that the price you sell at, is much more important than the one you buy at. Expensive currencies that are expected to keep going up are probably a better buy than cheap currencies that don't have an expected outcome.

Lastly, you need to develop a confident demeanor. The last thing you need is to get cautious and hesitate on trades. It only causes you to miss out on opportunities and stress out. The only real way to gain confidence is through positive experience, so that's why I suggest you use a demo account to make real live trades without actually using your own money. This gives you real world experience and when you're comfortable enough, you can start to use your own money.

This is the best currency trading information you need to incorporate into your head today. I'm currently giving a 7 day free forex training course. Newbies and experienced are all welcome. If you're interested in participating, check out the Casual Forex Trader.

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Foreign Currency Trading Automated Forex Trading Systems

Foreign exchange market is the busiest market in the world, with so many financial institutions engaged in trading all over the world. And with the advent of modern technology - like the internet - the numbers of traders have gone up . Foreign mercantilism trading is no different. While whatever haw encounter it adjuvant at prototypal to clear for forex trading strategies, they are mostly tautological and after effort started, whatever traders go on to amend their possess flourishing strategies.

Provincial currency trade online is the precious name. By the way, the surprising currency trade online coincidentally overlaid thanks to some professional forex trade online. Profit or losses is a fairly simple activity compared with the data or curve fitted, particularly with forex trading available in today's world. If you're looking at its only one rule with the fact to under-or-over, there may not be a price.

Automatic and automated forex trading systems is a tool that lets you specify a currency, an asking price, and a selling price beforehand. With a small seed amount and with the help of a broker, your purchase and sell orders will be executed instantly. Automated forex trading systems present advantage of trading multiple systems and multiple markets. Automated forex trading systems have generated a lot of interest and popularity in recent times. This market was once dominated by banks and similar large financial institutions; today it is attracting investors who may not have once dealt in this area.

Benefits:

An automated Forex trading system allow your trades to be made at any time of the day or night, regardless of your presence. With a manual trading platform , some of the profitable trades will be missed when the trader is not able to be at the computer. With an automatic Forex trading system, you are not required to do the actual trading yourself which means you are not putting in a great deal of time and are not chained to your computer. This is a huge benefit for many and for most people interested in Forex, it is top on their list of benefits.

Leverage is a powerful tool, and without proper risk management a high degree of leverage can lead to large losses as well as gains. In Forex you can familiarize yourself with a few currencies and trade on the daily market volatility or the longer term trends. Leverage off the work that other forex traders have done and made available to you. Understand why their systems work, and take them apart so you can understand how they think and see the markets. Leveraging your strength could be extravagant by organizing the Forex trading strategy. You may find hundreds and thousands of Forex trading strategies out there.

Traders should select signals from sellers who give a free trial. Legitimate businesses are willing to allow you to test their information before buying it. Traders in Bangkok who deal with brokers in Ohio may experience delays especially during volatile market conditions.

For more information on Forex Currency visit our site: All You Need to Know About Forex Trading Systems

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