Back at it again on this Monday morning, we are taking the market by storm. Today, I finished day trading with a little over $150 profit and was able to surpass my daily goal by overcoming a $150 deficit that in incurred from my first trade.
Below is a screenshot of my profits for today:
and here is a screenshot of my day trading chart:
From the screenshot you can see that I bought in several little transactions and sold in one big transaction.
This is what I called “averaging up” into my position. I try to minimize my overall level of risk by buying as a stock is moving in my favor.
This causes me to lose out on some potential profit, however, it helps me to feel more secure with the overall trade. If the trade was not to go in my favor then I would be stuck in a full position in a losing trade causing me to lose way more money.
Here are two tips that you could use to improve your trading:
Tip #1: Control when you enter a position
You don’t want to enter a position when the direction is unclear, and that is what led to my first red trade of the day for a loss of $150. I was able to overcome that loss and make a profit of $150 by entering my trades when I saw a clear direction.
There are 3 stages of a reversal that you should look out for: rejection, consolidation, and confirmation.
Tip #2: Control your position size
This is big if you are just starting out trading. If you are trying to learn how to trade for the long term then you should not be entering trades with super aggressive positions.
This only magnifies the opportunities for a loss and makes those losses that more devastating.
I would recommend trading with a smaller account until you can confirm that you are consistently profitable before adding any real money.
If you want to learn more about getting started investing/trading in the stock market, I recommend you read this article:
and here’s the book that led me to begin investing in the stock market in the first place. I highly recommend!
Thanks for reading!
Have a great day!