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What a Day Trader Is; What a Day Trader Does

Perhaps the single most important issue at the outset is to define exactly what I mean when I use the terms day trader and day trading. It will be in our best interest to define what the day trader does to make certain that you learn the skills you need to succeed in this highly demanding task.

A day trader trades strictly within the day time frame. The day trader, therefore, establishes positions at some time within the day and always exits these positions by the end of the trading session. Failure to exit positions by the end of the trading session violates the single most important rule of day trading. The day trader who does not exit posiВэtions by the end of the trading session is not therefore a day trader. I emphasize this point inasmuch as there are many individuals who wish to day trade but who, for lack of discipline, cannot do so effectively or consistently.

To carry a trade beyond the close of trading on the day of entry is to violate not only the cardinal rule of day trading but also to destroy the advanВэtage that day trading offers over all other forms of trading. You may find my insistence that a day trader only trade within the time frame of the day somewhat annoying, but I must emphasize this point strongly. I will do so repeatedly in order to impress upon you the importance of staying with your primary goal as a day trader.

For those who insist on violating the rules, I will provide some sensiВэble alternatives and procedures which should prove helpful. I do, howВэever, insist that positions entered as day trades be closed out as day trades with very few exceptions to this rule. Since a day trader is one who trades within the day time frame, day trading is the job of the day trader.

What Does a Day Trader Trade?

Although some would argue that only certain markets are amenable to day trading, I disagree. At some time or another all markets are suitable for day trading, provided that certain conditions are met. I will teach how to recВэognize which markets to day trade and when to day trade them. Regardless of which markets are traded, the day trader will adhere strictly to the policy of entering and exiting positions within the day time frame.

Some markets lend themselves more readily to certain trading sysВэtems, methods, and techniques. I will identify these for you. Some day traders will avoid certain markets, feeling, perhaps, that the potential for profit is not large enough or that risk is too high. This is not necesВэsarily true. The only thing which should dissuade a day trader from trading certain markets is lack of liquidity. I will be more specific later. For now, however, suffice it to say that all reasonably active futures markets have potential to be day traded at one time or another. There are some markets which are suitable for day trading almost every day, and some markets should be day traded only at certain times. I will tell you hows to know when given markets should be day traded and when they should not.