Andrew’s 10 Rules of Day Trading
Rule 1:
Day trading is not a strategy to get rich quickly.
Rule 2:
Day trading is not easy. It is a serious business, and you should treat it as such.
Rule 3:
Day traders do not hold positions overnight. If necessary, you must sell with a loss to make sure you do not hold onto any stock overnight.
Rule 4:
Always ask, “Is this stock moving because the overall market is moving, or is it moving because it has a unique fundamental catalyst?”
Rule 5:
Success in day trading comes from risk management - finding low-risk entries with a high potential reward. The minimum win:lose ratio for me is 2:1.
Rule 6:
Your broker will buy and sell stocks for you at the Exchange. Your only job as a day trader is to manage risk. You cannot be a successful day trader without excellent risk management skills, even if you are the master of many effective strategies
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Rule 7:
Retail traders trade only Stocks in Play, high relative volume stocks that have fundamental catalysts and are being traded regardless of the overall market.
Rule 8:
Experienced traders are like guerrilla soldiers. They jump out at just the right time, take their profit, and get out.
Rule 9:
Hollow candlesticks, where the close is greater than the open, indicate buying pressure. Filled candlesticks, where the close is less than the open, indicate selling pressure.
Rule 10:
Profitable trading does not involve emotion. If you are an emotional trader, you will lose your money.