Last one from me on the subject, these rules might help you.
1. The three E’s: enter, exit, escape
Rule No. 1 is having an enter price, an exit price, and an escape price in case of a worst-case scenario. This is rule number one for a reason. Before you press the “Enter” 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.
Escaping a trade, also known as using a stop price, is essential if you want to minimize losses. 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 hour of the market open
Those first 15 minutes (I think first hour) 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
Many rookies 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.
4. Keep a journal of all your trades
Many pros swear by their journal, where they 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.
5. Practice day trading in a paper-trading account
Although not everyone agrees that practice trading is important, it can be beneficial to some traders. If you do open a practice account, be sure to trade with a realistic amount of money. It’s not helpful to practice trade with a million dollars if the most you have in your account is $30,000. Also, if you do practice trade, think of it as an educational exercise, not a game.
6. Never act on tips from uninformed sources
Most pros know that buying stocks based on tips from uninformed acquaintances will almost always lead to bad trades. Knowing what stocks to buy is not enough. You also have to know when to sell, and by then the tipster is long gone. Legendary trader Jesse Livermore said it best when he wrote this about tips: “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.”
If you can’t trust your own judgment, you may want to avoid day trading altogether.
7. 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).
8. Be willing to lose before you can win
Although many traders can handle winners, controlling losing stocks can be difficult. Many rookies panic at the first hint of losses, and end up making a series of impulsive trades that cost them money. If you’re day trading, you must be willing to accept some losses. The key: know in advance what you’ll do if you’re confronted with losses.
Although anyone can learn to day trade, few have the discipline to make consistent profits.
What trips up many people are their emotions, which is why it’s so important to create a set of flexible rules. Your goal: follow the rules to help keep you on the right side of any trade.
9. Never hold over the weekend.
10. Never buy right at the end of a day.
11. Never change your buy in price up, set your price and stick with it.
12. Never buy off the bottom (falling knife) until you can clearly see that the momentum has changed upwards (even Warnie still gets this one wrong a lot)......Ace seems to be the better one here at it.
13. the most important one is RESEARCH - By research I mean research everything you know about oil (in the case of 88e) As well as having some knowledge about the oil market, no way do I have enough to make educated decisions, I studied for at least 30 hours and called numerous people in Oz and Alaska and Canada, and yes the next door neighbour, I reread over old reports, I spoke to 3 large oil producers, the list went on.
I can tell u now that less than 1% of owners of 88e did that sort of research, that is no good as you are buying based on the hype only, not your own satisfactory conclusions based on study and research.
Have 5 - 20 questions written down to ask the CEO or company officer or someone reasonably high up within the group. Call and wait for response, or email the questions. Once you have the answers, make your own judgement, research the answers, study more, ask more questions.
If they take more than a day to respond, don't buy their stock, if they sound vague, don't buy, if your questions were not answered to your satisfaction, don't buy, basically you want to find reasons not to buy, not to buy, as psychologically you already want to buy, so play the devil's advocate.
14. Buy with momentum. The people in here saying buy buy were right from 1c up to 7c, so they got it more or less right, and it is a great trading stock, I don't disagree one bit, any stock full of hype and momentum is the best stock to trade. No point trying to trade a stock that doesn't move for weeks. I don't think 88e will find enough oil to ever be economical for many reasons, but really who cares what i think, this stock is all about momentum, too many believe the story, and a lot of traders had planned to sell once the IRR came out, that was obvious, so one must sell prior to the IRR IMO, it just makes common sense, learn to buy first and sell first.
This is not a stock you buy and hold for 3 years, the stock could be dead in 12 months.
If buying at 1c or the like, then ok, hold for the long term, but buying at $200m market cap with limited cash and a long way to go is fraught with danger.
Ok to buy at 1-2c, but as the SP increases, so does the risk you can get trapped or taken out.
If you believe 88e directors over the IRR, then they still may be onto something here, so who do you believe?
This stock will drop early today IMO and will be a buy again about 1 hour into today (so long as you see momentum) and then sell out later today, well before 2pm, dont hold over weekend and don't buy near close.
Enough from me, good luck.
http://www.marketwatch.com/story/10-rules-for-rookie-day-traders-2011-05-03
(20min delay)