If you want to master your craft and profit your trade, this guide is for you! We’ll discuss some tips, including profit taking strategies that might work. Read on and take your trading game to the next level!
Profitable Trading Plan: Why Is It Important?
First, let’s define what a trading plan is. In a nutshell, it refers to a systematic method that involves using a decision-making tool to decide on your trading action. It’s a personal plan, but it must reflect the attitude of the general market.
Among others, a profitable trading plan is important because it allows easier trading. It states the different trading parameters that will trigger specific actions.
In addition, it will allow you to make more objective decisions. It will lessen the chances that you will end up entangled in emotional trading. With a plan in place, you can be more logical in your trading.
Further, a profitable trading plan makes you more disciplined. This allows you to stick to a plan instead of being easily influenced. As such, you’ll learn how to be persistent with your trading.
A profitable trading plan also helps you build your trade calendar. This way, you’ll know what to do at a specific time or depending on market triggers. It can also automate your investments or trades following certain parameters.
What are the Best Profit-Taking Strategies?
Are you looking for the best profit taking strategy? Below is a quick rundown of some techniques you must know for maximum day trading profit.
Indicate a Profit Target
One of the most important is to determine your specific profit target. Doing so will provide you with a clear exit strategy. This allows locking in profits before you can potentially suffer from catastrophic losses.
Discipline is an important part of this strategy. A lot of people end up losing a lot because of being greedy. So, once you lock in your profit, exit the market and start another cycle of investing.
Use Technical Indicators
A good taking profits strategy is to never rely on simple guesswork. Instead, every decision should have a solid basis. Hence, your day trading profit strategy must rely on various technical indicators. The xBrat Manager is the ultimate in proprietary indicators designed specifically to help you manage your trading potions to maximis profits consistently. Check out the Training Video fro it HERE
From moving averages to relative strength index, there are different types of technical indicators you can use. The best practice is to not rely on one. Instead, use a combination of technical indicators to further validate your assumptions.
Take a Partial Profit
It’s easy for greed to take over, especially in a market that shows great potential. However, things can go south, and you may not be ready for such. The best way to manage your loss is to take a portion of your profits.
By closing a part of your position, you’re making sure that there’s already something that you can have. At the same time, if the market moves higher, then you still have something left in your position.
Learn How to Read Charts
Make the most of the tools available at your disposal to maximize day trading profit. These tools can involve charts. They’re not just graphs and numbers, but they’re useful trading tools.
By reading the chart, you’ll have a better idea about the past, present, and future. You can correlate historical and anticipated prices. In turn, it will let you know when you should take profit and hold a position.
Trust Your Instinct
This might seem debatable, but many traders will say that you should trust your gut feeling. If you feel that something is wrong, then you should exit the market. Otherwise, you might have huge regrets and big losses.
Your gut feeling may be right. If you’re worried, you can read news articles, check out forums, and ask around. Doing so can help validate your thoughts.
How to Use Thinkorswim Profit/Loss on Chart Feature
If you want to trade for profit, using the right tools will help. Among others, one that should be on the top of your list is ThinkorSwim. It is a trading platform that uses powerful analytics to help you make the right decisions. With features like profit trade scanner, it can be a vital tool for day trading profit.
One of its most significant features is the ThinkorSwim profit loss on chart. It will let you see the profit and loss value of every position. Hence, you can have a better idea of how much you’re making or losing in your day trades.
Using this feature is quite straightforward. All you need to do is head to the Monitor tab. From here, left-click the P/L Open dollar amount, and you can see how much is your profit or loss in your position.
Are Vertical Spreads Profitable?
Before anything else, let me give you an overview of what a vertical spread is. This strategy requires trading two options simultaneously. It combines long and short options at different strike prices even with the same maturity dates.
Vertical spreads can be profitable. However, it highly depends on your trading strategy. It is beneficial because of delivering modest profits while keeping the risks low.
To maximize your trading profits in a vertical spread, you must be familiar with the different types available.
Among others, one you should know is a bull call spread. It’s the simultaneous buying of a call option and selling another call option with higher strike prices. A bull call debit spread max profit is the difference between the spread width and premium paid. The opposite is a bear call spread. It has the same parameters.
Another strategy is the bull put spread, which involves writing a put option and purchasing another one at a lower strike price. Its opposite is the bear put spread.
The Benefits of Having a Profitable Trading Plan
As we earlier talked about, a profitable trading plan is important to make trading easier and have a disciplined approach. In addition, it will help you become more objective in your decisions instead of relying on emotions. Finally, it can be a great tool to increase the chances of day trading profit.