Trading Management Tracker

What is the significance of Money Management in Intraday Trading (Day Trading)

Day trading as a business can be very profitable. It is probably the safest form of investing, as you are focusing on a small number of positions, you are not holding any positions overnight and you are able to enter and exit trades with pinpoint accuracy. However, many day traders find themselves losing due to poor day trading money management.

How Much Should You Risk? 

The size of your trading position, is in direct proportion to the value of your portfolio. The key to day trading success is to avoid big losers. To avoid this, you should only risk a total of 1% of your portfolio on any one trade.The minute you see that the trade is wrong, get out with small hit. Because in the end, the goal here is to see a small number of .25% or .5% losses, while your winners are in the range of 1%-3%. This is how you will win the game. Again, the 1% stop loss is for the unexpected sharp counter move, and it is not your goal to have this stop hit. You should know well before your stop is hit if you are in a bad trade.

Futures & Loans: 

Always trade in Cash, never touch Stock Futuores or Stock Options just because leverage is high or margin is low. You should master cash trading first before taking the next step.

Don't every use the emergency, investment or retirement funds for trading. Also, don't ever take loan or borrow money for trading. Traders that operate with a positive cash flow and utilize day trading money management rules, have a much higher success rate than traders that start out in the red.

Trade Log: 

Keep log of all your trades and review them periodically, which will help you avoid repeating bad trades and successfully repeat winning trades. Use our "Trading Management Tracker" for this purpose.

Positional Sizing:

This is the most important aspect when it comes to trading. We have written a separate article on this. Go through it here - Importance of Positional Sizing - https://marketsecretsrevealedforyou.blogspot.com//2018/01/positional-size-calculator.html

Take Away:

1. Money Management is considered the most important aspect when day trading.
2. If you do not implement a money management technique when trading, you will inevitably lose your money.
3. Your 1% stop loss is not meant to be hit! It is there to protect you from huge price moves.
4. Attempt to close all your losing trades before the stop loss is triggered if anything feels out of place.

Please download the Trading Management Tracker using the below link:
https://drive.google.com/open?id=1bsYOVpUxlIjN9W07-aU0chjfAGncfdx1

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