If you want to learn how to start day trading, you have to create a day trading plan. We encourage our new traders to start working on a SMART plan to create specific goals to strive for.
SMART plans call for new traders to create goals that are: Specific, Measurable, Attractive, Realistic, and can be set to a specific Timetable. If your goal is to make a living as a day trader in the coming months and years, there are some essential steps to take as you learn how to start day trading.
All new traders have to be disciplined and must have a process. In addition to having a SMART plan in place, new traders should draw up a formal day trading plan. While trading, traders need to have a simple checklist in front of them and should only scan the stocks on their watch list. To eliminate as many variables as possible, traders should keep their stock universe small and have a share-sizing chart. Process wise traders need to keep a trading journal, meet regularly with their trading coach, and pay attention to the rules of achievement chart that brokers use to track progress.
New traders should measure progress not by their profits and losses, but by how well they followed the rules. To make it easier to follow the rules and not give into the temptation for larger profits, guidelines teaches its traders to start small. These small trades make it easier for traders to diligently follow their day trading plan. When trading, it’s best to keep a trading log and mark up the day’s charts. All traders should study their logs and charts, keeping track of what they did right or wrong and looking for areas to improve. New traders should identify one area where they excel and work that into their day trading plan.
Through taking these measures to have a process and a day trading plan, Wall Street Traders can avoid many of the pitfalls that hurt new traders. These “trading demons” play into natural tendencies to be greedy and let emotion influence decisions. Some “trading demons” to look out for include:
For more information on how to create an effective day trading plan and learn more about CFD trading, please visit ETFinance.eu
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