Navigate a Down Market With These Day Trading Tips and Tactics
Michael Guess
Day Trading Coaching and Mentoring Including Trading Strategies for People Who Want to Become Profitable Day Traders of the Markets.
When the market falls, it is common for day traders as well as investors to become fearful and lose their focus. Without trading discipline and a solid strategy as a guide a trader may feel like they are cast adrift and start making mistakes. Or they may even pull out of the market for fear of losses. However, these are exactly the times when one can navigate a down market with these day trading tips and tactics.
Understand the Risks and Responsibilities of Day Trading in a Down Market
When getting into day trading it is important to understand the risks involved. Day traders commonly borrow part of the capital they employ in day trading in order to leverage the money that they start with. This approach increases the possibility of higher profits but also increases the risk of higher losses. With careful monitoring of the market a trader can profit from short term price swings no matter if the market is going up or down. By maintaining discipline in how one?enters, manages, and exits?their trades, success in down markets is possible.
Learn to Recognize Market Trends by Analyzing Charts and Data
Technical indicators that help day traders recognize and profit from market trends include moving averages, momentum indicators, chart patterns, and trend lines. Moving averages are especially useful when a short-term moving average crosses over a long-term moving average or vice versa. Momentum indicators help in determining when to enter and exit positions. The relative strength index is a commonly used momentum indicator.
Develop a Trading Plan with Clear Rules for Entry, Exit, and Risk Management
When the market is heading down it may seem chaotic. This is exactly when profits are possible. This is when day traders who follow clear rules for trade entry and exit will succeed. Risk management is essential when the market fluctuates wildly. By adhering to a proven day trading strategy and not panicking, a day trader can continue to profit in down markets as well as markets that are climbing. In fact, the time when investors are fleeing the market in panic is commonly a time for day trading profits.
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Track Your Progress and Review Your Performance Regularly
A successful day trader has a strategy that they follow. In order to ensure the profitability of that strategy, the day trader needs to routinely review their trading results. This should be during times of trading success as well as when they are experiencing losses. By tracking your progress and reviewing your performance on a routine basis, you will keep your approach to trading up to date and improve your trading success in all markets, up or down.
Utilize Automated Trading Platforms to Increase Efficiency
Some day traders rely heavily on automated trading. They commonly utilize automatic trading platforms to increase efficiency. The value of automated trading is that when it reads the market quickly and correctly it can lead to fast profits. The problem with automated trading platforms is that losses happen just as quickly when the strategies built into the system are inaccurate. At DayTradeSafe we teach the?rules-based systems?and discipline to trade in all markets and the ability to adjust trading approaches as required by changing market conditions.
The TradeSafe Trade Domination System?is a perfect example of a hybrid rules-based system that keeps control over trade entry in the hands of the trader with clear-cut signals and conditions that must be met, but is fully automated after trade entry, managing the trade all the way to the exit.”
Maintain Discipline - Don’t Chase the Market or Get Emotionally Invested in Trades
Over time the worst problems in day trading, as well as investing, come from the loss of objectivity in the midst of a trade. All of too often day traders and investors let trading success creep into their sense of self. They are successful in trading and are therefore good and successful as a person. Likewise when they are losing in successive trades, they think of themselves as failures. The biggest risk at these times is the loss of discipline in applying a time-tested strategy. Maintain discipline in good times and bad times and profit comes from skillful management of every day trade.