Are you tired of the same old day trading tips? Like, “cut your losses and let your profits run.” “Never let a gain turn into a loss.”, or the most repeated tip, “Buy low, sell high.”

So how about something new? Let me give you some specific day trading tips that will turn your trading around.

A good defense beats a good offense over the long haul. If you want to stay in the Trading "game", then developing a good defense is a MUST.

Rule Number One: Cut your losses immediately when the trade doesn’t go your way. There’s nothing harder to learn and nothing better. I’ll be even more specific. The average “run of the mill” day trading advisor will tell you to enter a trade, place a stop of 2 to 4 points, place a target that’s equal to your stop, or 2 to 3 times greater, and then wait for your stop to get hit. This is a big mistake that is going to end up costing *you*.

The time to wait is before you enter the trade, not after.

I’ve been trading for over 20 years, and I don’t trade like the crowd. The crowd waits for their stops to get hit. They sit there hoping their trade comes back from negative to positive territory, but it usually doesn’t and they lose money. They believe that the edge (probability of success) isn’t good enough on their entries. This is the crowd’s approach and it just doesn’t work. My day trading advice for you is to use radical soft stops that go against human nature.

In trading, your entries and your exits must NOT come naturally at first. Human nature is responsible for the fact that 90% of those day trading eminis lose money. If you follow the herd, you’ll lose money too.

Some of my subscribers tell me it seems impossible to get out of a trade early, just because it doesn’t move immediately into a profit. They worry about commissions. They worry that the trade will turn around and go their way in a few more seconds and they’ll lose opportunity. In fact most of the people reading this right now will try it for a few minutes (hopefully on a trading simulator) and decide it can’t be done.

Like I said, my techniques and day trading tips fly in the face of the untrained “gut feeling.” And that’s precisely why they work. Exiting my way is not the whole picture when it comes to the method I use for day trading support and resistance. Any complex process has to be broken down into small chunks at first, a person has to learn one thing at a time, especially when you want to learn day trading.

Always demand that the trade goes profitable immediately. When it doesn’t, get out immediately.

Radical, but it works.

My day trading advise for them is don’t wait for the market to prove you wrong, instead, if the market doesn’t immediately prove you right, run for the exits.

Example: Let’s say you enter a day trade. In the first 5 seconds it goes 3 or 4 ticks against you. What is your course of action?

1. Give it a chance, don’t waste the commission.
2. Sit and hope that it turns around before it hits your stop.
3. “Knowing” your entry was excellent, sit tight and / or move your hard stop away.
4. Add to the position (scale in) to bring your break-even point closer.
5. Get out of the position NOW!!! Don’t think about it, just get out.

Believe it or not, “e” is the right answer in my book. You have to be flexible with everything, but this is the foundation of my trading style. This is the default procedure.

Does it work?... YES it works!  But it only works IF you know where and when to enter. 

Mike Reed is author of TradeStalker's RBI Trader's Updates. He has been trading the Market for 23 years. His support and resistance numbers have been published on the internet since 1996. Mike's nightly support and resistance zones are specific and incredibly accurate. He offers an unlimited free trial of his nightly TradeStalker RBI Trader's Updates. http://www.TradeStalker.com.

Studies have shown that you should never risk more than 2% of your float on any trade. Why 2%? Well, in fact, many day trading professionals will tell you that 2% is too much. They`ll risk 1% or even as little as a quarter of a percent on any trade. Whatever percentage you pick, the idea is to ensure that no one trade is really going to affect your day trading float, positively or negatively.

Many traders don`t appreciate how powerful this rule is. By simply changing the amount of capital you risk in your day trading, you can turn a system from returning 10% to returning a 100% per annum. Now, by increasing risk, and investing more in a trade, you do increase your chance for reward. However, you also end up increasing your draw down as well. You may want to do a bit of testing to understand the importance and the power of changing this one variable. I always recommend that you never exceed a 2% risk. Sometimes it is difficult to understand this simple fact keeping your losses small will help you be successful in day trading.

Let`s look at an example of the 2% rule in action. If we had a day trading float that was $20,000, using the 2% rule we set our maximum loss to be $400 on any one trade. With this maximum loss, we could have a string of 50 losses in a row before we had no more capital left to trade with. In most day trading systems the chances of getting 50 losses in a row is very, very slim. However, the chances of going broke are even smaller, because when you implement the 2% rule correctly, the calculation is based on the current float size.

So, initially 2% of $20,000 is $400. However, if we experienced a loss first off, our day trading float would now be worth 19,600 dollars. We then calculate 2% of this new value, and set our maximum loss for our next position. 2% of $19,600 dollars would be $392. You can see that each time we experience a loss, our next maximum loss would shrink. As our portfolio increases in size, we`re happy to take on more risk as well.

I thought I`d play around with a few of the figures just to see what would happen if we had a string of six losses in a row. After receiving six losses in a row, our day trading float would have decreased to only $17,717. After six successive losses, we`ve only lost $2,283. Now, that`s managing your risk.

The fact that the loss is such a small component of our day trading float makes it much easier to gain back those losses. In this example, we`ve lost a little bit more than 10%. To gain back that loss and break even, we`ll need to make 11.1%. Now, imagine if we didn`t have good money management in place and we had a draw down of over 50%. If we have a draw down of 50% and we loose it, we need to make 100% return on our remaining capital to break even. You can begin to see the how a larger draw down makes it more difficult to recover from losses.

Novices often risk more than 2%. Even if you`re starting out with a small day trading float, you should practice good money management. You need to position yourself so that you can endure long strings of losses, and maintain your day trading system. When the market does turn around, you`ll be in the market positioned to capitalize on it`s moves. That`s what setting the maximum loss is all about, it keeps you in the market, allowing to you to keep your day trading system going. If you can survive some losses in your day trading, the profits will come. 

David Jenyns is recognized as the leading expert when it comes to designing profitable stock trading systems.

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A means to survive, an avenue to progress and vista to exchange thoughts, ideas and feelings… ‘Trading’ is perhaps as old as human existence on earth. It all began when the primeval man began swapping small useful items with each other in order to live and fulfill many of his needs. The time that followed saw a persistence and enhancement of this tradition. The current world runs on trading. It is a means to fetch bread and butter to many while for a large number of people trading business serves as toppings on a well-made cake. Trading therefore preserves an unparalleled significance across the globe.

This article will educate you about the various types and means of day trading, key terms and issues associated with it along with their benefits and shortcomings.

Types of Day Trading- depending on the time period for which the day trader retains the stocks with him or under his custody, different types of trading are classified.

• Basic Day Trading- Day trader commences the day by collecting stocks keeps them for sometime and endeavors his best to sell all of them at the end of the day. His primary work constitutes the sale and purchase of stocks. These transactions enable him to bag good short-term profits and mitigate the risk of sale of stocks in a fluster due to fluctuating price.

• Swing Day Trading- the day trader preserves the stocks for relatively longer period of time such as for few hours and few days to accrue big profits. But swing trading runs the risk of unstable market prices of the stocks.

• Position Trading- as the name suggests, the trader purchases the stocks and arrange the sales keeping in mind the position or the market value of the stocks. This may entail keeping the stocks for few weeks and even months, but good returns usually follow.

• Online trading- can be of any of the three aforementioned types but the sale and purchase of stocks is done via the Internet. Since this trading is through the medium of computer, an efficient computer with a 24-hour Internet connection is an essential requirement.

Issues behind S & P- When it comes to day trading, it is found that some particular stocks are good or beneficial than others. Primarily there are three factors that govern the sale and purchase of stocks-

1. Liquidity of the stock- Liquidity designates the amount of buyers and sellers for the stocks concerned. Liquidity of the stock is deemed to be directly proportional to profits ensued by it. Greater the liquidity of the stocks, higher is the comfort in vending them. But the liquidity value is never stagnant. It too depends on certain factors such number of share holders, outstanding shares, volume of transactions made and the number of market makers.

2. Volume- contributes to the liquidity factor. It can be conveniently evaluated. For instance a day trader’s stock should trade a minimum of 500000 shares each day.

3. Volatility- stands for the ups and downs the stock experiences everyday. If the volatility is less or negligible then the stock does not undergo any fluctuations and is thus rendered bad for day trading. It is believed that stocks that are considered good go through at least a $2.00 variation per day of normal trading.

4. Price Transparency- is the term coined for the market depth and the potential of the trader to acquire knowledge about the order of the stock.

General Tips for successful day trading-

• Study the market carefully before proceeding with purchase of stocks. The market indicators displayed on television and announced on radio are the best means to know about the market trend for the day.

• Do not be motivated by profits always. Every transaction may not translate into profits. Adopt a strategy and stick to it. Don’t flip your technique of working frequently.

• Be resolute and patient. If you are unable to incur spontaneous gains, profits may occur eventually.

• Never forget that day trading is a risky business and where there are profits there are losses too. 

Mansi Gupta writes about day trading. Learn more at http://www.improvedaytrading.com.