Tops 10 rules of stock market trading.
Prepare early.
Don't jump into your trading day unprepared. Every day, give yourself at least half an hour to list some stocks you chose based on research from the evening before. Then look at how these were traded the day before and decide if you want to go through with your chosen trades.
Pick trading times wisely.
Setting a trading schedule you're comfortable with is important, but you still need to base it on market realities. Statistics show most traders are more successful in the mornings and later afternoons. Avoid trading in the last hour of the day, though. The markets tend to get a little out of control at the end of the day and the chances of a successful trade go down.
Set a number of trades.
Over-trading is an excellent way to increase your risk of loss. What's more, it takes up your time and increases your stress level. Instead, set a maximum of between 10 to 15 trades per day and stick to your limit.
Manage your risk.
Done right, day trading can be downright boring. You should limit your risk well enough that you're not constantly on the edge of your seat. That means setting your entry points and exit points before you make a trade and always having reasonable stop-loss and take-profit orders in place.
Trust your indicators.
You watch the indicators for a reason. They're there to direct you based on thorough, emotion-free data analysis. No trading system is right all the time, but following yours faithfully is likely to give you better results than just going with your gut.
Get out of any trade you don't feel good about.
One of the top ways day traders lose money is by hanging on to a losing stock hoping their luck will turn around if they just wait a few more minutes. To avoid this, before you enter a trade, simply put dollar value limit on the loss you're willing to take.
Check your mood.
A few hours into your trading day, check how you're feeling. If you've made a few mistakes and you're starting to get frustrated or anxious, call it a day. If every thing's going well, feel free to keep on trading.
Beware of greed.
You may not think of yourself as a greedy person, but the prospect of earning hundreds or even thousands in a short period can make anyone a little money-hungry. Don't let your desire for a quick profit overwhelm your common sense.
Commit to learning.
Unless playing with money is your hobby, you're involved with day trading for profits. Reaching the level of professionalism that it takes to make solid profits consistently takes several years of continuous learning.
Don't go it alone.
Along with educating yourself on the fundamentals of day trading, keep up with what successful traders are doing right now. Investigate their trading philosophies and strategies and see how you can apply them to your own trades.
Following these top 10 trading rules for day trading isn't going to help you get rich quick, but it could go a long way towards keeping your investment capital safe and developing your ability to make profitable trades day after day
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