Many can perfectly trade but few can successfully day trade like a pro. More than eighty percent of day traders are losing abundantly. Everyday, millions of dollars are wasted and lost.
As a day trader, you will respect the opening bell of London at 3 am eastern time, 8 am London time and the New York opening bell at 09.30 am eastern time, 14.30 London time. You will wait for the opening bell before placing any trades. After the preparation, there are some steps for day "trading like a pro".
First step after day trading preparation: 5% rule
It is important to understand at early stage that, day trading involves risks. No trading decision is risks free and will contain some elements of risks. Traders must protect their trading capital at all cost. One simple rule of money management and risks control is to use only five per cent of your trading account. If you open five trades, the total amount of money allocated to those five trades should not exceed five per cent of your trading account.
Second step in day trading like a pro: Risk Reward Ratio
It is common to miss a good night sleep, and to trade without pause. The main issue in this case is the over trading. It is important to control the number of trades that you are taking to avoid paying too much in commissions. The expected reward must exceed at least twice the risk. The risk-reward ratio must always be considered before entering the trade.
Third step in day trading like a pro: Use the right strategy
When you buy or sell when it is time to buy or sell at the right place, that is a win. On the other hand, when you sell or buy at the wrong time and at the wrong place, that is a loss. Therefore, one should use the right strategy for each trading challenge. Using trending strategies during trending period and range trading strategy during low volatility period.
Step four in day trading like a pro: Look at the price first
One of the reasons why traders fail in day trading is because they misuse or misunderstand the indicators. Many indicators are just repeating the patterns of the price. In fact they are different version of the price. No indicators can ever replace the price. The price is the universal language of all traders and does not hide anything. Traders must keep their eyes wide open and try to understand what the price is revealing. There are many indicators but the price remain the same.
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