Learn From a Pro Day Trader: 5 Tips
Do you know when to use that Reverse button in NinjaTrader’s SuperDOM? Many traders don’t bother with it. However, knowing how and when to use it can lead to many opportunities. John Paul from DayTradeToWin recommends using the close button because reversing can lead to slippage.
Do large candles represent an opportunity to place a trade in the order of the big move? No. In fact, this could mean the move is exhausted and there may well be a reversal. John Paul’s expertise says the move is less likely to continue once a big candle appears.
The next trading tip involves the number of contracts. Even if you have a lot of money, it doesn’t make sense to risk a large portion of it. Practice with real-time data, start off slow, and optionally increase contracts as you see consistent performance. Even if you have traded a lot in the simulator mode, using real money, even one contract, can produce a different experience. Real money may involve a different set of emotions, for example.
The ATR (Average True Range) can be used for measuring volatility and deciding if the market is too fast or too slow. This has been covered quite a bit in the plethora of day trading videos available at DayTradeToWin.com.
When it comes to placing a trade, is there a point where you should eventually close the position if the profit target or stop loss isn’t hit? Yes, certainly. Keeping a position open without a plan causes moment to moment risk. John Paul often uses four to five candles on 1-Minute or 5-Minute based charts. If nothing happens (no profit target or stop loss), then he’s out. That’s sticking to the rules and being objective. That’s a method of price action trading taught by DayTradeToWin. Cut the trade loose if it’s not making you money!