Day Trading Risk and Reward: 4 Tactics To Decide Your Best Strategy

Author: Brian Heyliger

Are you frustrated with day trading and your lack of day trading success? I have a solution for the problems which stem from what "typical" day traders try to do, which is to make many, many trades one after the other and grind out tiny profits each time.

That day trading strategy is counter-productive. It forces you to make too many decisions and that mental gymnastics will play havoc with your emotions. That's bad for you, because the stress means it's unlikely you'll be very happy -- even if you're actually making money! It's much better to be both profitable and happy.

So here's my 4 part solution:
1. You want to make money as a day trader as easily as possible by following the adage "work smart, not hard". Coming up with enormously complicated (or high-frequency) trading methods is not working smart. It's working hard.
2. Create (or obtain) a system with highly-defined criteria that will give you no more than two high-probability signals a day, perhaps three on an exceptional day. (Here I define "high probability signals" as those that will generate the target profit 75% of the time or better).
3. Once you have such a system, trade it with discipline. That's all you need to generate a $100k+ annual trading income. The high-probability nature of such trading means you will make money if you follow the trades consistently.
What could be better?
4. Well, it's even more of an advantage if most of your high-probability trading signals tend to show up in the first couple hours of trading (i.e. before lunch if you're on Eastern Standard Time in North America, or before breakfast if you're on the other coast). That factor will normally free you from spending all day in front of your monitor each trading session. You'll have a better life by doing other things in your life besides trading.

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About the Author
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Brian Heyliger is a successful futures day and swing trader who specializes in the e-mini S&P, Treasury Bond and other high-probability, high-profit markets.