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Tips to Become a Better Day Trader

There are many things the beginner needs to know when starting out as a low touch day trader. We compiled some of the best tips and tricks to ensure you are starting out on the best ground possible. Many of these tips relate to understanding how to manage risk. While some of these things might seem obvious to a seasoned trader, they can be helpful for someone new to the trading game.

Have a Trading Plan

Prior to putting a single dollar into the market, you need to have an idea of how you are going to make money. From there, you should determine the steps required to get the profits you want. The best way to do this is through a trading plan. This is a document that outlines what trades you will make and when, how you will enter a trade and why, how you will determine position size and how to get out of losing and winning trades.

Prove it Works

After you have a plan, you should test it with a demo account to see what happens. If it doesn’t work in a pretend environment, it’s not going to work in a real low touch situation either. If that’s the case, you need to revise the plan and try again. This should continue until you are able to regularly make profits over many weeks. At that point, you can move on to actual trading in real markets with a hope of success.

Review Regularly

Reviewing your trading is what allows you to get better. Without reviewing, you don’t get to see what is going wrong and what is working well. On a daily basis, take a screenshot of your chart after you have marked all of your trades on it. Keep those and review them on the weekend. Consider improvements you can make. At the end of the month, check the weekly plans and see if you are improving over time.

Single Market Focus

When you are a new trader, you might feel like you should jump into everything and give it a shot. This is not the right route to take. You want to focus on a single market or even one instruments, such as one stock or ETF. Work on it until you have mastered it. Being exceptional at one thing will give better results than being mediocre at numerous things.

Trade Checklist

As a beginner, it can be easy to get distracted from your trading plan by watching price charts hour after hour. To avoid that, build a checklist to use for each trade. This will ensure the trade fits the criteria that you have set in your trading plan. This can be done quickly whether with a physical checklist or mental checklist and will help prevent making mistakes.

By implementing these tips into your trading, you’ll be better prepared as you take what might be a life-altering journey. We wish you the best of luck!