Risk Minimizing Day Trading Tactics, Reducing Day Trading Risks

Tuesday, June 3, 2008

Risk Minimizing Day Trading Tactics

Day trading is the most active form of trading having maximum trading risk. It requires real-time news, quotes and charts. Day traders practice many complex strategies for getting profited from the market. Here are some simple tactics which can minimize trading loss of day traders, especially beginners.

Concentrating on certain group of stocks or an industry. Specializing gives traders a chance to study deep and find more profitable opportunities.
Using traders systems with hot/short lists. Then traders can find opportunities quickly and easily for stocks (or other instruments) they are trading.
Modify and update your hot list and stock groups frequently.
Avoiding trades when unsure about the market. It is better to keep capital for future opportunities than wasting it on uncertain positions.
Concentrating on one opportunity at a time. This considerably minimizes trading risk and help in maximizing opportunities by increasing position sizes.
Limit the number/frequency of trades. It is better to concentrate on one or two trades a day.
Keep the risk minimum. It is ideal to keep the risk possibility less than 1% of your account size.
Be careful with trading on margin. High margin trades are better when you are sure about price direction.
Write down your trades. Note how you profited from a trade and why you made loss from another. And frequently go through them.