Day traders are a group of investors that constantly trade stocks, bonds or commodities online. Successful day traders have something in common, including defining buy and sell rules, using low-cost online trading platforms and high-quality information to execute the trades.
1. Learn technical analysis.
Technical analysis is the approach that day traders used to conduct investment research. It is often concerned more with the given stock’s statistics such as trading volume and price relative to the 12-month average as opposed to the market share and corporate profitability. If you would like to master the technical analysis, you are recommended to take an online course or read a book about technical analysis.
2. Doji and candle sticks.
Candle stick charts are helpful for many day traders to plan their trades. Doji is a kind of signal indicating a trend reversal on a candle stick chart. If you find a doji appears and the price of a stock has been dropping for several days, there is a good chance that the price is going to head back up soon. Day traders will also want to loot to support and resistance levels on the stocks and try to predict where a stock is going to head.
3. Set entry and exit points.
It is a common rule for professional traders to set entry and exit points for the trades. Trading ideas with entry and exit points can be found on useful websites like Investors Business Daily. Setting the predetermined buy and sell rules could effectively prevent traders from allowing their emotions to decide their trades, instead, they let their trading system make the decisions. A good trading system works well with good investment information; hence you should properly set the entry and exit points.
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