What Are Good Strategies for Day Trading Options?

At first, day trading options can be as fun as the casino. However, as time goes by, it is critical that you take the fun and emotion out of day trading. You need to be emotionless and objective about it, which is difficult because it is your money.

Most Important Advice

Next, the other most important piece of advice you will ever receive about day trading is to take profits when you reach your objective. You do not want to extend the trade or wait overnight when you could lose out on your gains.

Small Trading Tips That Will Amount to Big Returns

Do Your Homework

Do your homework about the market and monitor headlines, earnings reports, news and events, and anything else that could affect the market.

Decide and put aside a set amount of funds you are willing to risk on each trade, somewhere between 0.5% and 2% of your, for example, $20,000 trading account.

Time Spending

How day traders spend their time is split. Some day traders will wake up three hours before the market opens to do their due diligence, make their trades at the opening bell, and finish at noon. Others will wait until the closing bell to end their day.

This is entirely up to you, what you are trying to accomplish, and how often you day trade.

Penny Stocks

One more piece of advice: Stay away from penny stocks since many of them are illiquid! That is unless you have done your research and expect a massive day.

Start Small and Carry On

These are only some of the strategies to employ. The longer you day trade, the more measures you will devise.

Remember, start small and work your way up. You never want to use your retirement savings, emergency funds, or your mortgage to day trade. Set yourself up with a small amount of capital, a sum that you are willing to lose without mortgaging your future.