5 tips for building the best day trading strategy
When you are involved in buying and selling futures, forex or stocks every day (known as day trading) you need to develop your own winning day trading strategy. The best day trading strategy is one that helps you achieve your goals of making a profit from short term and long term transactions. The strategy that works well for another person may not work for you because of the differences in the types of assets and personality involved. The goal is maintain a steady growth of income and wealth through a methodical approach that is repeatable.
Getting started with a day trading strategy
Liquidity and volatility are two terms that have significance in trading for a futures, forex or stocks day trading strategy. Liquidity refers to the available funds to buy or sell an asset, and volatility refers to the range that is expected in price over time. The more volatility a financial asset has the better it is for you because you have a much better chance of being able to sell “buy low and sell high”.
Steps to building a day trading strategy
Before you invest heavily in the financial markets you should understand how a futures, forex or stocks day trading strategy works. You should spend some time following trends and focus on one or two instruments to determine how they perform over time. Once you feel comfortable that you have what it takes to build a trading strategy on your own, there are five simple steps you can follow:
CFTC RULE 4.41 HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing one's financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results. All Software provided or purchased is strictly for educational purposes only. Any presentation (live or recorded) is for educational purposes only and the opinions expressed are those of the presenter only. Testimonials may not be representative of the experience of other clients or customers and is not a guarantee of future performance or success.
Comments