Healthy Day Trading Strategies

There are a lot of theoretical trading strategies out there from novice traders (watch out who you follow on YouTube). In a 2005 article published in the Journal of Applied Finance titled The Profitability of Active Stock Traders” professors at the University of Oxford and the University College Dublin found that out of 1,146 brokerage accounts day trading the U.S. markets between March 8, 2000 and June 13, 2000, only 50% were profitable with an average net profit of $16,619.
Every trade is capped at a 1% risk (slippage has never been an issue in 11 years of trading because I don't trade during news or against momentum), and daily risk is capped at 3% (not discussed in this article but discussed in Daily Stop Loss: ). So you need to be losing all trades and not winning any to see any significant drawdown…and since our winners are bigger than losers it takes less winners to make back the loss.



The only difference between these two is that a retail trader simply traders for himself where as the institutional traders don't don't trade their own money because trade their financial organisation's trading account which means these institutional traders can trader large trading accounts trading multi million dollars positions.
Limit orders are much safer to use than market orders when stock trading They protect your entries and exits whereas market orders are a much trading strategies learn riskier because you don't know what your fill is going to be. Feel free to check out our limit order vs. market order video to learn more.

Day trading is part and parcel for the stock brokerage career, and day traders at big financial firms do trade swings with leverages of 20:1 or more (leverage is taking out a short term loan to buy shares, hoping that the profit on selling them will pay off the loan and its fees).
All CFDs (stocks, indexes, futures), Forex and cryptocurrencies prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes.

For all the scenarios I will assume that you never risk more than 1% of your account on a single trade Risk is the potential loss on a trade, defined as the difference between the entry price and stop loss price, multiplied by how many units of the asset you take (called position size ).