Before I conclude, I want to give you some rules and guidelines to enable you to be a better, more profitable day and swing trader:
1. Know your entry price, exit price, and stop-loss even before you enter the trade in case of a worst-case scenario.
This is rule number one for a reason. Before you press the “Enter” key, you must know when to get in, when to get out, and what to do if the trade doesn’t work out as expected. A stop price is essential if you want to minimize losses. Knowing when to get in or out will help you to lock in profits, as well as save you from potential disasters and large capital drawdowns.
2. Avoid trading during the first 15 minutes of the market open.
It’s very tough to trade in the first 10 to 20 minutes, and it takes years of trading experience and an acquired confidence level before you should consider trading near the opening. Those first 15 minutes of market action are often panic trades or market orders placed the night before. Novice day traders should avoid this time period while also looking for reversals.
3. Use limit orders, not market orders.
A market order simply tells your broker to buy or sell at the best available price. Unfortunately, best doesn’t ...