Plan and trade in accordance with your plan. To “trade like a Pro”, you must first prepare. In day trading, preparation is key. Day traders who are serious will always check the news before trading. For a successful trade, you need to be aware of what the economic news will say and when it is going to happen. Only the careless will disregard economic news. The best places to find out economic news are Yahoo/finance (or Google/finance), MSN/money or find more Google/finance. It is important to base your decisions on either a technical or a fundamental analysis.
Day Traders are expected to observe the London Opening Bell which goes off at 3 AM Eastern Time, 8 AM London and New York Opening Bell that goes off at 9.30 am Eastern Time, 14.30 London. To make trading decisions it’s important to wait until London has opened. It takes eight steps to “trade with a Pro” on a trading day.
First step after day trading preparation: 5% rule
It is important to understand that each trading day involves risk. You must understand that every decision you make in trading will involve some degree of risk. At all costs, traders should ensure that their trading account is protected. The money management system is an easy way to minimize your financial risks. Do not use more than five percent of the account. You cannot make more than 5 trades in a day. Trades are not allowed if the amount you spend exceeds $5.
Step two for today: Trade like a pro
Many traders engage in trading during London Sessions, New York Sessions, or Asian Sessions. It’s very common for traders to continue trading without pause. This is a case of excessive trading. Commissions due to brokers are the ones that they pay. If you want to reduce your commissions, then limit the amount of trades. It is not a good idea to take an unproductive trade simply because you are enjoying it. You should ask: Is it a trade that makes sense for me? You must consider it at least as risky. Trading must take into account the trade-off between risk and reward.