1. Follow your three E’s: enter, exit, escape
This is rule number one for a reason. Before you press the “Buy” key, you must know when to get in, when to get out, and what to do if the trade doesn’t work out as expected.
Knowing when to get in or out will help you to lock in profits, as well as save you from potential disasters.
2. Avoid trading during the first 20 minutes of the market open
Those first 20 minutes of market action are often panic trades or market orders placed the night before. Novice day traders should avoid this time period while also looking for reversals. If you’re looking to make quick profits, it’s best to wait a while until you’re able to spot rewarding opportunities. Even many pros avoid the market open.
3. Have a selling plan (working on a set of rules on how to take profits but need more work)
Many spend most of their time thinking about stocks they want to buy without considering when to sell. Before you enter the market, you need to know in advance when to exit, hopefully with a profit. “Playing it by ear” is not a selling strategy, nor is hope. As a day trader, you’ll set a price target as well as a time target. Do not let winners turn to losers
4. Keep a journal of all your trades (Very important)
Keep records of all their winning and losing trades. Writing down what you did right, or wrong, will help you improve as a trader, which is your primary goal. Not surprisingly, you’ll probably learn more from your losers than your winners, I have learned a lot from my losers believe me.
5. Never act on tips from uninformed sources
I know from experience that nobody can give me a tip or a series of tips that will make more money for me than my own judgment, wake up early, do your home work, don’t read too many articles that can change your rules of not selling when your trading plan is screaming “sell”.
6. Cut your losses
Managing losing trades is the key to surviving as a day trader. Although you also want to let your winners run, you can’t afford to let them run for too long. It’s more art than science to get it right, but learning how to control losses is essential if you are going to day trade. Once again, never forget the three E’s: (enter, exit, and escape).
7. Never hold positions overnight (especially weekly options)
8. Adapt quickly to changes
If a short-term trade isn’t working or is moving slow, don’t hesitate to switch sides. The market and stocks can change very quickly, and you must be able to change with them.
You must be more disciplined than the average trader. Never depart from your rules no matter how good a trade "looks" or "feels" to you if it violates your objective and back-tested rules. Don’t trade with a bias because you think something should or shouldn’t happen, let the stock tell you what its next move will be
10. Keep it simple.
If a trade is working for you, stick with it! The market doesn’t moves fast enough sometimes but follow your indicators and have no more than 3. Too many lines, levels, candles can make you crazy and ruin a good trading day, it's better to follow 2 or three indicators, see Phase 1 for a basic trading system.
Follow the lead