How safe is your day trading strategy?

Business / Wednesday, August 14th, 2019

At the initial stage of trading, most traders take the safe route by choosing the day trading method. It is good to keep excitement low. It helps the trading mind get the right vibe because day trading is mostly executing trades with smaller lots. Even the leverage is taken lightly for the trades. The desired profit margin is also simple like 1:2 for most executions. Unfortunately, the rookie traders are the main culprits who think about day trading improperly. Most of the cases, the traders define their trades with too much emphasis on the investment. Some even think about earning big profits from overtrading. Improper skills on market analysis also affects the trading approaches. That is why we are here with this article to ensure the best possible day trading strategies. Let’s discuss few important topics will be mentioned for a day trading method. To be secure from your side and get optimal results from the day trades, try to follow what we discuss in this article.

Simplest risk factor management

As day traders are only bound to execute within a day, there is no need to invest big money. It is decent enough to work with a nano lot. Take leverage of 1:10 so that your account does not blow up due to high risk exposure. Using the right leverage, the lot size will be automatically adjusted. You can also focus on the market analysis to find quality trades. When it comes to technical analysis, the traders can get the idea of perfect trade setups. Think about multiple timeframe analysis like using 5, 15 and 30 minutes. If you can define the proper position sizing, the executions will be hassle free. No matter what you do, the proper risk management has to be arranged. If you manage to scale your risk exposure, you can easily become a profitable trader.

Control over the position sizing

For the best executions, the new traders in Hong Kong need to worry about proper position sizing. Almost anyone can think about a decent position for trade in your trading platform. But finding the right closing point is not easy. You have to be right about the volatility. Sometimes, the assessment of the traders can cause less profit. Closing the trades too early or too late will kill the risk reward ratio for that certain trade. If you do the assessment and set profit margin properly, you are most likely to get a decent result. For the safety of the trades, you can also use stop-loss and take-profit.

The setting of your risk exposure is known as position sizing of the trades. All the secure executions happens when traders can embrace the idea of position sizing. Defining a proper risk to profit ratio will make things easier. If you devote yourself to the right path to improve the potential, you can make consistent profits. From time to time, the trading skills will also let you aim higher.

Define market analysis policies

Without having a precise knowledge on trade management skills, you are most likely to lose money. The market analysis is the topic which you need to understand from the core. Without the arrangement of the proper trends, traders cannot even scalp with their money. You need to learn about using the trend lines and chart patterns to know about the potential trends. Even the supports and resistances are considered to be potential trading zone for the retail traders. No matter which timeframe you are analyzing with, you have to understand the role of market retracement. Besides the technical terms, the traders also need to worry about the fundamental analysis. Think of technical analysis as an insurance of the fundamental analysis. Blending technical and fundamental data will help you to execute high quality trades. So, focus on your trading skills to improve your trading edge.

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