As you become a seasoned
day trading investor, you'll quickly notice there are literally
thousands of strategies to follow. Some of these strategies will be
a good fit for you while others will prove to be of no help at all.
The goal, of course, is to minimize your trading risks while
maximizing your profit potentials. What works for one investor
doesn't always work for the next day trader, though. It's imperative
to see which strategies suit your weaknesses and strengths the best.
One strategy that every trader should
follow is following a strict three percent daily maximum. This means
you will never risk more than three percent of your account balance
on a single day. More so, you won't risk more than one percent of
your account balance on a single trade. Expecting losses is
something to prepare yourself for, but with the three percent daily
maximum, you minimize your loss potential.
Sticking to a stop-loss strategy is a
good idea as well. Your stop-loss amount is the amount of money you
are willing to lose on a single trade. Once you hit your stop-loss
amount, you exit the trade and move on to a different one. Ideally,
you'll want your stop-losses to be somewhere around
1.5 times from the current high-to-low range.
As you implement different strategies, you'll be able to
pinpoint ones that optimize your earning potential.