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how to manage daily trading risks

 

As a daily trader, both as a beginner and professional, your life is centered on consistency. One way to produce consistency is to trade at the same time every day. Some daily traders trade throughout the trading session (9:00 a.m. to 4:00 p.m.), while some other traders only trade at certain hours.trading only 2 to 3 hours per day is quite common among daily traders. These are the hours you should focus on.

For the stock market, the best trading time for daily traders is 1 to 2 hours after opening (9.00 - 11.00 WIB), and 1 hour before closing. 2 hours after the market opening is the period you want to become an expert in trading.this is the most volatile time of the day, offering the largest price movements and the biggest profit potential. Likewise the last 1 hour ie 3 to 4 pm is the right time to trade, because some fairly large movements often occur.if you only want to trade for an hour or two, trade in the morning session.

As a daily trader, you don't need to trade all day long.you might generate more profit consistency by trading only two to three hours a day.

Manage Your Daily Trading Risk

After you determine the market that you will be involved in (stocks, forex, futures, etc.), have adequate hardware and software tools, and know the best time for daily trading, then you need to know how to control risk.Daily traders must be able to control risk in two ways: trading risk and daily risk.

Trading risk is how much you are willing to take risks on each trade. Ideally, risk 1% or less of your capital on each trade.this is achieved by selecting an entry point and then setting a stop loss, which will get you out of the trade if the trend starts not in line with expectations. Risk is also influenced by how much position you take (the number of lots you buy), therefore, learn how to calculate the right position size for stocks, forex, or futures.taking into account the position size, entry price and stop loss price, there is no single trade that will make you lose more than 1% of your capital.

Also control your daily risk. Just as you don't want a single trade to cause a lot of losses to your account, you also don't want one trading day to damage your week or month.therefore, set a daily loss limit. One way is to set it at 3% of your capital. If you bet 1% or less on each trade, you must lose three or more trades (without a winner) to lose 3%.with a good strategy, that shouldn't happen too often.

After you reach the daily limit, stop trading for the day. After you consistently make a profit, set your daily loss limit the same as your average win day.for example, if you usually make 500 thousand on the winning days, then you are allowed to lose 500 thousand on the losing days. If you lose more than that, stop trading.the logic is that we want to keep our daily losses small so that they can easily be replaced by gains on other days.

Practice Strategies For Beginner Daily Traders

When you are just starting, don't try to learn everything about trading at once. You don't need to know it all.as a day trader, you only need one strategy that you repeatedly apply. The job of a daily trader is to find patterns / patterns over to make a profit and then exploit them.

You don't need a college or other professional degree, you also don't need to read hundreds of books to do that.just find a strategy that provides a method for entry, set stop loss and take profit. Then, start implementing the strategy in the demo account.

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