If you ask that to a day trader, they will always say ‘yes’ – because they love to trade. ALL day traders love to trade – but that doesn’t always mean they always should! There are times, days and months that are better than others for day trading. There are some days that are even difficult for experienced traders to navigate, let alone beginners in a day trading course. You can gain a huge advantage if you can figure out what kind of day it is before the market begins whenever possible.
While determining the potential direction of the market during the pre-market analysis, you should also determine what kind of day it might be during this time – and whether or not it would be a good day for potential profit or high risk. Try to determine if it will be a trend, range bound or sideways; look at days/weeks before if necessary to find similarities.
Pay attention to current news topics and financial calendar events; for example, 2 days prior to the FOMC announcement, the market can be flat, choppy or rangebound in anticipation of interest rate news. Look at what month it is and what’s common during the month/season you’re in compared with other years, for example, October often is more up, while August can be mostly down.
The best traders look for ways to improve their win probability and decrease their risk. On days they predict will be choppy or rangebound, beginners may be better to sit out or use a simulator. Experienced traders may choose to either sit it out and wait for the market to change or trade but modify their risk with smaller position sizes.
For beginner/intermediate traders (<2 years experience), there will be days in the stock market they will want to avoid until their account is larger (so they can withstand more risk) or have more experience. The problem is that figuring out which days these are is virtually impossible on your own. Without the help of experienced traders guiding them in the live market, a new trader will not be able to learn this material from reading books.
While this material is covered in our Limitless Volume Day Trading Course, the best way to learn it is in our live trading room. This is often something we cover in our daily pre-market analysis. Contact us for more information about our live trading room or click here for a FREE, no obligation, 7-day pass and check it out for yourself!