Day trading is not easy, but it can certainly be simple. Keeping things simple is a mark of professional traders.
Simplify day trading by following these nine steps.
1. De-clutter your trading desk
Day traders spend long hours at their trading desk. Having a clean and organized work space helps to simplify the trading environment.
A clean trading desk will also cut the risk of accidents like spilling coffee on your keyboard. Murphy’s Law dictates that the best trade of the day will take place while you are cleaning your keyboard.
Designate 10 minutes after each trading session to tidy up your desk, so that you will start the next day with a simple trading environment.
2. Clean up your day trading computer
Other than physical clutter, digital clutter is also a problem. However, it is often overlooked because it doesn’t really stand in our way. Well, until your computer starts to slow down and on some occasions stop responding to your click on the “Buy” button.
Prevention beats cure. If you can, dedicate a computer to day trading. Do not download or install any non-trading applications. That will lower the digital clutter in the first place.
You also should have a digital spring cleaning regularly. Every week, I clean my computer with CCleaner from Piriform, which has a free version that works well.
3. Remove one trading indicator
When it comes to trading indicators, “the more, the merrier” is not true. More indicators need more time to interpret and might very well lead to analysis paralysis.
Remove one trading indicator from your charts today to assess if you really need it. It could be the crutch that you do not need.
If you would like to simplify your trading and get used to trading without indicators, here are some resources to get you started.
- How to Trade with Price Action
- Top 10 Price Action Trading Books
- Day Trading with Price Action Trading Course
4. Remove the news feed when you are trading
Many day traders listen to the news feed when they trade. The news feed is essentially a trading indicator. If you do not know how to use it, you are definitely better off without it.
When the news is better than expected, but your technical analysis points down. What do you do? What weight do you put on news?
These questions complicate your trading thought process, and do not add value unless you have a system to trade news.
5. “All in, all out” Trade Management
Do you have a complicated scaling in and scaling out trading strategy?
Are you sure it is helping you to earn more? Have you conducted an analysis of your trades to confirm this?
If not, you are just complicating your trade execution unnecessarily.
Try “all in, all out”.
6. Use only one day trading setup
Choose only one trading setup from this list. And learn to use it well.
It simplifies your trading and helps you to focus. You will find it easier to become as expert.
One sharp knife is better than a dozen blunt ones.
7. Trade only one instrument
Each instrument has different volatility and tick sizes. If you trade multiple markets, you need to size your positions differently each time to risk the same amount.
Every market has its own price tendencies at different times of the day. So you will also need to learn the quirks of each market.
Sticking to one instrument simplifies both your position sizing and learning process.
8. Stay in the same trading time-frame.
Like the choice of instrument, your trading time-frame has an impact on the level of trade risk. We need to keep it constant for simple position sizing.
In addition, keeping the time-frame ceteris paribus allows us to check what works in our day trading strategy.
9. Accept infrequent trades
If you follow the recommendations above, you will end up taking fewer trades. With only one time-frame, one instrument, and one trading strategy, you will have limited trading opportunities.
You must accept the fact that if you want simplicity as a day trader, you must think like a hunter that stalks its prey quietly over a long period before gunning it down.
Patience is a virtue and it belongs to the day trader with a simple approach.
The simple day trader
These are 9 ways to simplify your day trading. But do not go on an extreme minimalist route.
The basic principle is to look at the value of each addition to your trading process. If it does not help you, remove it. If it does, keep it.
Make things as simple as possible, but not simpler.