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3 Day Trading Tips You Can Use Today
Easy money can be earned the first hour of the day if you are ready; keep it simple to earn consistent money. Sometimes in this internet age it can be very easy to have information overload. When you have too much to choose from it can feel like you have all the tools in the box but no idea how to use them.
These tips are a few of the key ingredients of our trading plan.
#1 Share size comes last! Too many traders initiate trades with the same share size all the time no matter the volatility of the stock or the market conditions. Your first consideration should be how much I am willing to risk per trade; this is a specific dollar amount. Next decision is the stop loss based on charts or any other criteria you use. Be sure to allow the stock to sufficient room to breathe, never place your stop at the exact number. When you know risk amount and stop loss parameters, then you allocate shares.
#2 Be prepared for the open. You must have a prepared plan before the market open. You must know which stocks you plan to trade long and which ones short. It amazes me how many traders I mentor that basically “wing it” the first 45 minutes. On top of that which of the stocks in your morning list are the cream of the crop?
If you have a list of 10 stocks which are trading in sync with the market? Are any of them consolidating the last few days that would setup an easy breakout trade? Those are the ones you can’t miss. Order flow is easiest to read in the morning and you should get solid follow through. Take advantage of it by being ready. Our traders have the first 60 minutes mapped out for them; it is just a matter of reading the order flow letting the market play itself out.
#3 Have an idea but not an opinion for the day. What is the difference? If you have an opinion you will only see what you want to happen, or to put it more bluntly you will only see one side of the market. The side you want, the side that validates your brilliant analysis. When this happens you will be caught off guard if it doesn’t unfold the way “you knew it would.” That translates into bigger losing trades.
If you have an idea you have a bunch of “if-then” scenarios mapped out in your head for both your stocks and for the market. You have a game plan for what “should happen” but you will trade what actually does happen. I know this sounds insanely obvious but I can tell you most plans go out the window as soon as the bell rings. Remember having a plan and following it is how you repeat success.
One last point, on any given day you may have 4 stocks to short and 6 stocks to go long. It may be common for 8 out of the 10 to not act according to plan. That is fine let those trades go, you only need those two to play out to make a great living.
Pete Renzulli is a full time day trader, trading author and mentor located in NYC. To receive his weekly newsletter “Keystone Trading Journal” and the valuable report “two simple secrets for finding the easiest stocks to trade each day.” please follow this link: http://www.keystonetradinggroup.com/trading.htm
Tags: Today, Trading
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