High Probability Trading Strategies - Daytrading Tactics  

By: Dave Lex
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. Try to incorporate them in your daily trading plan and i believe you will see an improvement in your trading.* Concentrating on certain group of stocks or an industry. Specializing gives traders a chance to study deep and find more profitable opportunities. Know the characteristics of certain sectors or group of stocks and how it is affected by the market index. For example, if you are trading Google, then you would want to be noticing the Nasdaq index. Therefore if you have any long positions on and you see the Nasdaq index starting to tank, chances are that Google will likely follow the index in going down and you can refrain from opening a long position or close your current long positions.* Using traders systems with hot/short lists. Then traders can find opportunities quickly and easily for stocks (or other instruments) they are trading. For example if you are doing gap trading, then you would track on your list the biggest gappers for the day and see their movement on a list so you can shuffle through them quickly and keep an eye on the rest.* Modify and update your hot list and stock groups frequently. For example, if you feel that stock XYZ is doing nothing or is going sideways, remove it from your list and concentrate on existing list or do a search to see any "hot" moving stocks are available for potential trades.* Avoiding trades when unsure about the market. It is better to keep capital for future opportunities than wasting it on uncertain positions. A very important skill in trading is to learn to sit on your hands when you do not identify any high probability setups. If you try to force a trade, chances are you will end up losing in the long run. Also it is important to identify a choppy market as more often that not, you will get killed in the whipsaws.* Concentrating on one opportunity at a time. This considerably minimizes trading risk and help in maximizing opportunities by increasing position sizes. Instead of having 10-20 positions at a time, try to cut down to 5 or so positions so you can monitor them more carefully.* Limit the number/frequency of trades. It is better to concentrate on one or two trades a day. This depends on your trading setup. If you trade off a 1 minute chart, the number of trades you will take in a day will definitely be more than trading on a 1 hour chart. So trade on different time frames to see which you feel comfortable trading in.* Keep the risk minimum. It is ideal to keep the risk possibility less than 1% of your account size. This is probably one of the most important part of trading. If you risk a fixed 10% per trade, you will bust your account if you have 10 losing trades in a row, and this is very possible.* 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. As William Eckhardt said this in an interview, "If a trader doesn't know why he's losing then it's hopeless unless he can find out what he's doing wrong. In the case of the trader who knows what he's doing wrong, my advice is deceptively simple. He should stop doing what he is doing wrong. If he can't change his behavior, this type of person should consider becoming a dogmatic system trader."Daytrading can be lucrative if you do it properly. Implement these high probability daytrading strategies and tactics and you will surely find yourself improving in your trading