People who do Day Trading are called Day Traders. They have the habit of opening and closing their positions in the forex market within one day.
It could even be more, or less than that. Usually, lovers of Day Trading are those who do not like to hold their positions for days. The hallmark of Day Trader is that it wants to get immediate profits quickly. A profession as a Day Trader is not allowed by trial and error. You must really understand the rules of this Day Trading.
Day Trading Rules Before You Begin
1. Day Trading Is Not An Investment
The first rule. You must understand that Day Trading is not an investment. Day Trading is a short-term activity that is purely carried out to benefit from the difference in price movements in one day. There are many Day Trading Risks. One of them, the risk of volatility in which currency fluctuations occur so fast. This can bring benefits if used wisely, but it can be disastrous if you do Open Positions without consideration of analysis and good Money Management.
2. Day Trading Not Gambling
The second rule of Day Trading, do not ever have a mindset that Day Trading is gambling. That mindset will make you trade without a plan, and tend to hunt for profits at random or at will. Although Day Trading is not an investment, this activity requires traders to Open Buy or Sell Positions based on careful analysis.
3. Apply 5W and 1H in Day Trading Day Rules
Thirdly, you must have careful planning in trading. The plan will make your trading more directed. If you are confused about where to start, you can apply the 5W and 1H strategies, which are What, Who, When, Where, Why, and How.
5. End Each Trading By Reviewing Day Trading Rules
this is often missed by novice traders, even though the benefits are very important. There are always lessons to be learned at the end of every trading session. Therefore, always take your time to identify the success or failure that you have after closing one trading session.
If necessary, make a forex trading journal, and write what open positions have been done. Fill in the journal with day / date, time of entry, exit time, pair, entry price, SL, TP, Lot, and additional notes for evaluation. By conducting a review, you will be able to correct every step that is applied in the next trading opportunity. Important things that should not be missed
6. Use the Stop Loss of Day Trading Rules
the next one is wise in using Stop Loss. Did you know that the desire to remain in a floating loss position can result in greater losses and potentially destroy your account? Stop Loss can be a savior in critical conditions. That is, trading without using Stop Loss is a fatal mistake that must be completely avoided.
To be able to determine Stop Loss, you must really pay attention to the state of price movements. Do not put Stop Loss at a level that is disproportionate or not commensurate with the real conditions that occur in the market.
For example installing random Stop Loss on the amount of the pip at will, between 25 pips or 50 pips. This has the potential to cause your account to close a position too early, even though the price can still move in the direction you previously analyzed. The best Day Trading rules for determining Stop Loss are to place it below the closest support level for buy positions, or above the closest resistance level for short positions.
7. Use Limit Entry Orders in Certain Conditions
Do you often close orders too early before a trend ends? This has the potential to reduce the profit you get.
This is what traders usually do when Open Position uses the usual method or Market Order. Therefore, you can try to enter the market with alternative entry methods, including Limit Entry Orders and Stop Entry Orders. This one day trading rule allows you to enter the market in an unusual way.
Also Read : 4 Tips for Accurate Entry
It could even be more, or less than that. Usually, lovers of Day Trading are those who do not like to hold their positions for days. The hallmark of Day Trader is that it wants to get immediate profits quickly. A profession as a Day Trader is not allowed by trial and error. You must really understand the rules of this Day Trading.
Day Trading Rules Before You Begin
1. Day Trading Is Not An Investment
The first rule. You must understand that Day Trading is not an investment. Day Trading is a short-term activity that is purely carried out to benefit from the difference in price movements in one day. There are many Day Trading Risks. One of them, the risk of volatility in which currency fluctuations occur so fast. This can bring benefits if used wisely, but it can be disastrous if you do Open Positions without consideration of analysis and good Money Management.
2. Day Trading Not Gambling
The second rule of Day Trading, do not ever have a mindset that Day Trading is gambling. That mindset will make you trade without a plan, and tend to hunt for profits at random or at will. Although Day Trading is not an investment, this activity requires traders to Open Buy or Sell Positions based on careful analysis.
3. Apply 5W and 1H in Day Trading Day Rules
Thirdly, you must have careful planning in trading. The plan will make your trading more directed. If you are confused about where to start, you can apply the 5W and 1H strategies, which are What, Who, When, Where, Why, and How.
5. End Each Trading By Reviewing Day Trading Rules
this is often missed by novice traders, even though the benefits are very important. There are always lessons to be learned at the end of every trading session. Therefore, always take your time to identify the success or failure that you have after closing one trading session.
If necessary, make a forex trading journal, and write what open positions have been done. Fill in the journal with day / date, time of entry, exit time, pair, entry price, SL, TP, Lot, and additional notes for evaluation. By conducting a review, you will be able to correct every step that is applied in the next trading opportunity. Important things that should not be missed
6. Use the Stop Loss of Day Trading Rules
the next one is wise in using Stop Loss. Did you know that the desire to remain in a floating loss position can result in greater losses and potentially destroy your account? Stop Loss can be a savior in critical conditions. That is, trading without using Stop Loss is a fatal mistake that must be completely avoided.
To be able to determine Stop Loss, you must really pay attention to the state of price movements. Do not put Stop Loss at a level that is disproportionate or not commensurate with the real conditions that occur in the market.
For example installing random Stop Loss on the amount of the pip at will, between 25 pips or 50 pips. This has the potential to cause your account to close a position too early, even though the price can still move in the direction you previously analyzed. The best Day Trading rules for determining Stop Loss are to place it below the closest support level for buy positions, or above the closest resistance level for short positions.
7. Use Limit Entry Orders in Certain Conditions
Do you often close orders too early before a trend ends? This has the potential to reduce the profit you get.
This is what traders usually do when Open Position uses the usual method or Market Order. Therefore, you can try to enter the market with alternative entry methods, including Limit Entry Orders and Stop Entry Orders. This one day trading rule allows you to enter the market in an unusual way.
Also Read : 4 Tips for Accurate Entry