This Day Trading Checklist Will Teach You How to Use Our Trade Room Effectively
Looking to learn day trading? If you want to become a successful day trader then preparation in the pre-market is the key to success. In the video above, Dan shows you his morning pre-market routine on how he gets prepped for the market open.
What is day trading? It's buying and selling stocks multiple times a day. What makes day trading important to the stock market? Day traders provide the liquidity. Liquidity is what moves the market and what keeps it going. The stock market is a tug of war between buyers (bulls) and sellers (bears). That battle is what moves price.
Day trading has the perception of gambling and being high risk. As a result, knowing how to day trade stocks in a safe manner keeps it from becoming gambling. In fact, we could argue that day trading is less risky than any other style of trading. Read More
The reason for this is that you're not holding for days. As a result, you're playing short term moves without the possibility of the stock's direction moving against you overnight.
However, no matter the style of stock trading you practice, there is risk involved. Hence the need to practice trading risk management. When you learn how to day trade stocks using patterns coupled with support and resistance, you have a much better chance of a higher profit ratio.
There are a few different ways to day trade. Hot keys are one of those methods. Hot keys are shortcuts that perform a specified duty at the touch of a button.
For trading, it allows you to buy and sell stocks within a matter of seconds. As a result, you can trade high float high volatility stocks quickly. Which means you're catching the moves within seconds.
You get better entries, exits, faster trade execution and less distraction. There are brokers such as Interactive Brokers that allow you to edit and customize your hot keys.
As a result, the hot keys are set up to your exact specifications regarding shares amount, stop loss limits and order style. Knowing how to day trade stocks using hot keys means you're making plays on parabolic stocks. Those stocks that shoot up $5 then back down $6 all within a minute. Check out our trade chat rooms.
If hot key trading isn't your style and you like to slow things down, then pattern trading is the way to go. Patterns help to slow things down. They provide a clearer direction of what a stock's going to do. Click here to learn penny stock trading.
There's no magic formula that'll tell you what direction a stock is headed. However, candlestick patterns go a long way in helping to determine the direction. There are types of patterns; continuation and reversal patterns.
It's important to know what they look like and how to find them on charts. That'll determine what kind of trade you make. A continuation pattern such as a bull flag helps you to find a good entry and knowing that going long is the best option.
A bearish reversal pattern like an evening star pattern means you'll want to take the short side of a trade. If you go long on a bearish pattern, there's a good chance you'll take a loss on the trade.
Patterns are formed by the fight between buys and sellers. They wrestle for control all day every day. One side is always winning so knowing how to day trade stocks means you have to read the patterns the struggle gives you. If you need more stock training then take our free courses.
Support and resistance might be the most important strategy in trading. Those are levels any trader worth their salt pays close attention to. The age old trading adage is buy low (support) sell high (resistance). The opposite is true for shorting.
Many times new traders that don't know how to day trade stocks see a stock that's running and want to get in the play. As a result, they buy at resistance levels. Then their position looses and they end up selling for a loss. If they knew where support and resistance were, then they'd know not to get in that trade.
If you miss your entry then stay out! A stock will pull back or dump and unless you're shorting, you don't want to be caught in the dump. You can buy at the pull back. We teach trading live in our trading rooms each day. Check out our trading service. Try our trading community free for 14 days! Read More
One of the smartest things you can do when learning how to day trade stocks is make a trading plan. Then you stick with that plan. You can open a simulated account and practice the plan you've come up with to see how well it works for you. We hope that this day trading checklist was helpful for you.
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