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Short Term Trading Tips

Trading Tips
Written by Andy
  1. I think intraday trading is a totally different ball game to end of day trading and requires a wholly different mindset to succeed.
  2. Traders who are targeting shorter-term opportunities usually use a tight stop loss which means that getting the timing right is important.
  3. A different risk management regime applies for short-term trading as you have to add the exposure time factor to your assessment on how much to risk. For instance with short-term trading I might at times heavily increase my exposure for a matter of minutes or hours, and trim it back to a safer level before the day ends. At times like that my percentage in one stock may briefly be very excessive.
  4. I haven’t traded Fridays intraday for a long time now. Even in 2008 bear I found Fridays were worse days. They sometimes give a decent move after the USA markets open but mostly not. I think it’s something to do with short term traders don’t want to hold positions over the weekend so they only close existing trades on Fridays but don’t open fresh ones. Also, if they are trading large positions on high leverage why pay interest cost for the pleasure of holding over the weekend when markets don’t move. Just look at the FTSE over the past hour. 12 points and that’s with better than expected US durable goods figures. Total waste of time imo.
  5. Initially mastering share trading first is probably best although not essential. Share trading teaches you about discipline, technical analysis, expectations, money management, strategies and psychology in a slower more thorough manner. Imo its better to go into highly emotional day trading after you have all that experience behind you.
  6. Short term trading and psychology. Talking of mindset, I had a school friend who was a very successful amateur boxer. What set him apart from the rest of us was that he didn’t mind getting hurt. He accepted pain and injury was part of the sport. He had no fear of being hit with a punch that might cut his face or knock him out. The rest of us (his mates) were complete wussies by comparison. I think you go into day trading on similar terms – it frightens you or it doesn’t. I can’t see how one could ever trade if they are frightened of losing and I don’t see how one could easily loose the fear, but I’m no shrink.

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