Avoid the Cringe of the News

To preserve your trading capital and avoid a heart attack, it is best to stay away from news related market activity. Even proven strategies are proven to fail when there is a large amount of volatility and gut instinct present in the market. After data releases, such as the Nonfarm payroll or inflation statistics, the markets will go wild with volatility.

Plan to Avoid the News

A trading plan planner should always be kept to outline under what conditions your strategy works best, but also to include times when the strategy is not as profitable. Key news dates should be written down in an easy to see area of your workstation. Markets like to respond to news 15 minutes before the actual news release and continue for hours after the news breaks. Avoiding high volume news times is the best way to preserve your trading capital and keep the cringe-inducing trades to a minimum.

Preservation Equal to Growth

To master day trading is to know when not to take a trade. Preserving your capital is equally as important as growing your portfolio. If the market loses 30% one year and a profitable trader preserves his capital, he's outpaced the market by 30%. While wealth was not created, he made an effective gain of 30% after comparing to other investors. In a downtrend, trading discipline is critical to keeping your head and your profits.

Monitor the Trends

Cringe-inducing trades are often the product of a sideways trend, rather than a downtrend or uptrend. The uncertainty that comes with a sideways trend makes it that much more difficult to swallow than a well defined uptrend. A sideways trend can snap at any time, sending the price up or down at a violent pace.

Stay True to Your Trading Strategy Plan

The most common mistake made in testy markets is to interfere with your trades. Moving stop losses, taking early profits, or letting a loser run are all dangerous. It is best to let the proven strategies work their magic over the long run than to interfere with the odds on the short run. Creative techniques, such as trading smaller trade sizes or avoiding the trade all together, is the best way to prevent a loss.