Day trading is the term that is used for buying and selling financial instruments. The transaction should be done within a day or even several times a day. You can play a lucrative game by taking the benefits of small price moves. But for the newbie’s, the game might be dangerous as they are new to this field so, they have to play it safe. This article will check some tips that will maximize profit using price action day trading strategies.
Let’s check how it works:
Keep your funds ready for the Call
It would help if you planned how much capital you are willing to risk while doing trade. The decisive day traders take the risk of less than 1% of their total amount in the account. It is advisable to keep aside the profits and use them for funding. Note, you may and may not win; you just have to be ready for it.
Don’t use Penny Stock
You might be looking for the deals at low prices but stay away from penny stock. The penny stocks are illiquid, and the chance to win it is generally bleak. Unless you have done in-depth research, and find the right opportunity, stay away from penny stock.
Knowledge leads to Deliverance
One of the crucial price action day trading strategies is having every ounce of day trading knowledge. You must know about the procedure for trading and keeping up with the trading news and events in the stock market, economic outlook, and FED’s rates of interest. Before jumping into it, you should do your homework correctly.
Eliminate the loss through Limit Order
You have to think of the orders that you will use to enter or exit from day trading. While placing the order, you should check that it is the best price available. With the limit order, you will surely get the price, but the execution is not guaranteed. Through limit order, trading will be done with extra precision where you will set the price for buying and selling.
Patience is the key
While doing day trading with price action or price structure, stay calm. It is justifiable that there are times when the stock market gets in your nerves. It is your responsibility as a day trader to keep calm and composed. Make sure you don’t make decisions emotionally and act logically.
Time is the biggest investment
You have to invest lots of time in day trading, as the name itself proves. A trader has to track all the activities in the stock market to find the right opportunity. So, to find the right option, you have to invest all your time.
Start with Small Amount; Increase Gradually
If you are a newbie, then start by investing in one or two stocks. When you have a few stores, then you can easily find and track opportunities. Currently, it is convenient to trade in fractional shares, so start with investing a small amount.
Set Time for Trade
The orders placed by the traders start to execute in the morning when the market opens. This will contribute to price volatility. A successful trader will quickly understand the pattern and find the right time to make profits.
While planning a strategy, it is not necessary to win it to make it a profitable one. Most of the traders win about 50% of their trades made. Make sure that every time you trade, the risk is limited up to a specific percentage.
Stay With Plan
If you want to become a successful trader, you have to act and play fast. Follow the formula rather than chasing the profits. Stick with the plan, and don’t let your emotions overweight that will lead to abandoning the strategy.
These are some of the day trading strategies using price action structure that you should follow while investing in day trading. It is, indeed, a profitable strategy. All you have to do is stick to the plan, be patient and apply skill consistently. This is how it works;
- It will definitely help you build profit
- It will help you in assessing the balance of your strategy.