About Day Trading: Sitting On Your Hands Can Save You Money
 | from Adam Milton
Hands can be very dangerous things when you are in a trade. They can be used to make costly mistakes such as increasing a correctly placed stop loss. Sitting on your hands (either physically or metaphorically) is very effective at preventing them from doing something bad, and can save you a lot of money. This week's day trading newsletter includes: - advice about never increasing your stop loss (day trading quick tip # 5), - advice about sitting on your hands (day trading quick tip # 6), - a profile of the donchian channel indicator, - and the weekly economic calendar with volatility expectations. Good trading everyone, and no, you're not allowed to use your nose instead of your hands :-)
|
![]() |
In the Spotlight |
Day Trading Quick Tip # 5 - Never Increase Your Stop Loss
Stop loss orders are additional orders that are designed to exit a losing trade while limiting the amount of money that is lost (hence the name stop loss). Stop loss orders can be used as the primary exit for a losing trade, in which case they are placed at the price at which you want to exit your trade. Stop loss orders can also be used as an emergency exit (also known as a crash stop), in which case they are placed at a price which you do not expect to be reached unless something goes wrong ... find out why you shouldn't move your stop loss
| | Day Trading Quick Tip # 6 - Sit On Your Hands
Undisciplined traders frequently make mistakes that they would prefer not to make, but they make them anyway. These mistakes include things like making a trade that is not part of their trading system (known as taking a punt), over managing a trade (e.g. moving targets and stop losses for no reason), and exiting a trade too early (usually because of fear). Whatever the reason for these mistakes, they need to be avoided in order to be a profitable trader. One useful method of avoiding these types of mistakes is to sit on your hands ... find out why you need to sit on your hands
| Donchian Channel
The donchian channel is a volatility indicator, that calculates the recent price range using the recent high and low prices. The donchian channel is displayed as high and low bands (creating a channel containing the prices), and therefore it looks similar to other volatility indicators such as Bollinger Bands. However, the donchian channel is different in that it uses a simple calculation using only the recent high and low prices (rather than standard deviations or other indicators) ... find out about the donchian channel
|
Sponsored Links | ![]() |  | | Advertisement
 |
