When you think about the job of a day trader, you think it’s all exciting – always taking risks and living on the edge. Perhaps that is true because trading results are erratic. But what’s real though is that often the day is quite simple and mundane. Want to know more about it?
Discounting the charm images and the dollar signs in between, together let’s read through what day trading is all about, and think twice before deciding if it’s the job for you.
Mornings For The Day Trader
Usually, day trading is an early venture. If you’re in the Eastern Time, for example, you should be in front of your computer before 8:30 AM, relaxing and reviewing previous trades. Sipping your coffee and munching on some biscuits would be great as you wait for the official open. At this time, companies and banks in the United States are open for business, as well as London. It’s also a great day for forex trading. So anything from 8 in the morning to 9 and above is the most relevant timeframe.
If you’re day trading from home, you can relax and practically do what you want. However, you must know how to discipline yourself. Without someone telling or pressuring you to start working, you will need to nudge yourself to get up from bed an hour before trading starts. Mentally preparing yourself is one of the most important strategies you must practice.
You can rehearse the techniques that you intend to use today and perhaps create a plan on how you will handle them. Next, revisit your account balance and be aware of how much you can risk when you trade. The safe zone will be 2% or less of your available balance, and only 1% if you’re a beginner. Make notes on your calendar on the major events for the day. Remember that exit trades happen about three minutes before a major economic event.
Day Trading – The Real Deal
The official opening time for trading stocks, futures or forex is 8:30 AM. Trading should be done at least an hour after the official open, which is from 9:30 to 10:30 AM. If you’re interested in futures specifically, 8:30 to 9:30 AM is the best time frame to trade. If the market is alive and active, you can keep trading until 11:30 AM EST. After that, volatility begins to decrease.
Novice day traders try too much and work more hours, but really, less is more. Trading during lunch hour is a no-no. Have a hearty lunch and patiently wait for 2 PM to come around. You can continue trading from 2 to 4 PM, as the last hour is the typical time for day traders to trade in the afternoon.
The primary job of a day trader is to look for trade setups, implement them, and then manage them according to the strategy that you think is best to use.
For the day trader, they can relax after 10:30 AM or for some after 4 PM EST – but the day is not done quite yet.
A review must be done to keep track of all trades done and how you traded them. Notes should be made on the number of trades and hours traded, number of winning and losing trades, and the net loss or profit for the day. They should be specific in pips, points, and cents because they are scalable and quantifiable figures.
When this is done, save the details in a folder you have pre-created before the trade began for the day. You will be reviewing everything in the folder at the end of each week, month and finally at the end of the year.
Once you’ve done reviewing, all work is done for the day. You can relax, rejuvenate, reflect on the losses, and prepare for another trade the next day. Are you ready to take on the job?