Lets face it. When you are a day trader you don't care if the market is going up or down because you have the full set of skills to take advantage of both long and short opportunities. Having said that you'll find certain seasonal trends tend to make life a little easier for you by increasing both turnover and volatility. One major seasonal trend that is upon us right now is the Christmas rally and today we'll take a look at 3 day trading tips to get the most out of it.
Tip Number 1 - Clearly identify your Day Trading Edge
Something that paralyses many traders is having access to countless trading methodologies that all look brilliant on paper and unfortunately waste many hours of backtesting and research. If you've already spent a year or so day trading you should be somewhat familiar with what your edge is in the markets. Think of your edge as a statistical advantage you have that positions you in such a way as to consistently profit from the daily market activities. One of the beauties of day traders is the high number of opportunities that present themselves. You only need a small edge that is coupled with a high degree of opportunity and you'll be on to a winner.
Tip Number 2 - Seek Only High Volatility Stocks
Volatility goes hand in hand with opportunity. When was the last time you heard of someone making astronomical gains trading a property trust for example? Never. It just doesn't happen. Instead, when running your daily scans for new opportunities put a volatility filter on your selection criteria. One of the best ones to use is the Average True Range or ATR. Only look to filter stocks that are showing a 2% -3% daily movements and then rank those opportunities from most volatile to least volatile. That list will be your future profits so 'mine' it well. During peak seasonal periods like Christmas you can find some stock with excellent daily volatility.
Tip Number 3 - Commit to writing a Day Trading Journal
Many people ask for the best trading book available and little do they realize that the best book you can get your hands on is written by none other that YOU. Commit to keeping a trading journal or day trading diary for a full 30 days and notice the results at the end of it. Take advantage of the Christmas Rally period by writing your thoughts daily and begin to analyse your thoughts on entry, exit and risk management. Begin noting what you could have done better and mark every trade you take out of 10 with a 10 meaning you followed your trading plan perfectly and a 1 meaning you totally trading against your trading plan.
Take advantage of the Seasonal trends by Day Trading using the 3 tips given above and watch your confidence level soar.
Action: Discover the 7 most Critical CFD Trading Tips and 2 of the most common CFD Trading Strategies. Learn more about the Contracts for Difference (CFD) revolution by going to http://www.learncfds.com/
Article Source: http://EzineArticles.com/?expert=Ashley_Jessen
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