Posted by forex at 9:47 AM
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1. Setup a brokerage account. If you intend to day trade, then your choice of brokers is very important, because you could be placing several trades a day, so you want to make sure that you get a broker that has low commissions and tight spreads. Two that you might consider are TradeStation and Interactive Brokers as they are discount brokers designed for day traders. These both will allow you to log on from any computer in the world to place trades.
2. Find a good trading system. If you already know that you want to day trade, then you will need to find a good day trading system. The best place to look is at EliteTrader.com or if you are interested in trading Forex you can try ForexPeaceArmy.com. These are both trading forums, where participants evaluate and rate software, courses, trading systems and brokers. There are no affiliate links allowed so for the most part you are getting unbiased reviews from independent third-parties.
3. Set up your charts. Most day traders use a combination of 5, 15 or 30 minute charts in conjunction with longer terms ones such as the one hour and daily charts. You will need to have a real-time data feed so using a service like e-Signal or TradeStation's software are imperative.
4. Get a dependable high speed Internet connection and have a backup. You will need at least a broadband DSL connection with at least a 256kps connection or faster. You should also have a backup connection setup with your cell phone just in case the main connection goes down. There's nothing worse than being in a position that moves against you, that you can't get out of.
5. Trade the opens and closes. The U.S. markets are open between 9:30 a.m. and 4 p.m EST. The majority of the volatility, and thus opportunities happen during the first two hours of the openin g and the last 1 ½ hours at the close. So ideally these are the times you should be most active in watching your charts. For those in Asia and Australia this would mean that you will be up late at night between 10 p.m. and midnight to watch the openins. For those in Europe you can trade the openings during the early evenings.
6. Keep good trading records that includes the date, why you entered the trade, stop loss, profit targets, entry price, exit price and whether you followed your rules. Having records is imperative to being a successful trader so that you will know where you've made your mistakes.
7. Prepare yourself mentally and educate yourself. Whatever you may have heard trading is not an easy business to be successful with. While it is simple to understand, it is difficult to master. So make sure to educate yourself. A few good books to read are the 'Market Wizards' series by Jack Schwager, in which he interviews the most successful traders in the world to find out what makes them successful. 'Trading to Win' by Ari Kievn and 'Trading in The Zone' by Mark Douglas are also good books to learn about mastering your mind and your emotions.