Trading is not only about technical and fundamental analysis. How to choose broker? When one should take profit or submit to stop loss? How to discipline oneself? What tricks does psychology play with traders? Find answers to these and many more questions at this section.
Price bar charts paint a graphic picture of a stock's price movements both during the day with the 5 minute bars, and longer term with the daily bars. The picture unfolds showing short and long term supply and demand and how it has moved the stock's price. This helps pinpoint specific areas of buying or selling pressure as they develop. The bar charts alert you this „at a glance“ when the bars trade into a tight range that hugs up or down against a certain price (usually the day's current high or low).
This is one of the simplest tactics for keeping your capital intact, but one of the most difficult rules to keep for a trader hooked on the excitement generated by the experience of a winning trade. There are no hard-and-fast rules for stops. You will have different limits for stops, depending on what stage of the day you are trading.
I tend to trade the post-open periods far less frequently than when I first started day trading. Now, my goals are to start premarket preparation at about 8:45 a.m. and be finished trading by 10:00 a.m. EST. With $20,000 capital, I would look to get between $500 and $1000 per day when I win, and to keep losses minimal, less than $200, when I don't. Trading the market open period gives plenty of opportunity to make between $50,000 and $100,000 per year.
There is plenty of information in this book and others that tells actual and aspiring traders how to make a profit. Lack of information is not an obstacle. What is an obstacle is people's behavior. Too many people don't know how to accept success when it comes along. They need adversity to strive against, rather than being able to maintain focus on winning consistently. This is not a conscious decision by any individual trader.
The first method to work with broker now known as „old-fashioned,“ is to pick up the telephone· and call your full-service broker. In this world of high-speed Internet connections, it's the most inefficient and costly way, but if you're comfortable with your broker and want to continue this way, by all means do so. Just be aware that you pay the highest commission rate of all order-entry methods, and those commissions shave a hefty chunk off of your profits.