Day trading is an extensively misrepresented word for newbie traders. Actually, day trading means not holding on to your positions beyond the current trading day. Here are some facts and common sense rules about day trading that all serious traders should know. These reasons prove why some traders lose money while investing in stocks, currencies, futures, or anything else. Whether if you find these rules simple or difficult, it is essential to implement the rules.
Always limit your losses
By simply limiting your loss you follow one of the most important rules. But, there is no thumb rule to be a successful active trader or to limit your losses. However, some basic steps can be followed. Many people lose money in day trading is due to not limiting their losses.
Trading is only for part of your money
Keep in mind that, you must not day trade with all your money. It means that you will only use part of your money for day trading. Also make sure that a bulk of your capital should be in very solid, fundamentally sound investments. So, it were chosen for fundamentally correct reasons unless, you become an extremely successful and reliable day trader.
Appropriate training and practice is required
Consider day trading like any other business that you run, since it needs lot of hard work and dedication on your part. Many people makes mistake of “sending” and order to buy or sell a stock or currency to the market with “trading.” This is very easy to send an order to the market. Intraday trading certainly takes time to master. Traders must dedicate at least a few hours a day to do become master in it. When you are not willing to dedicate the time required, then you must not expect rewards in return and do not waste your time cutting corners.