Day Trading is the lucrative act of buying and selling financial instruments on the same day. When played well, you take advantage of the price moves throughout the day, thereby pocketing a hefty sum at the end of the day. Conversely, it can end up being a dangerous game, especially for newbies and those who don’t have a well-thought-out strategy.
Here, in this article, you can find a list of simple day trading principles that help you to get the basics right. Without further delay, let’s dive into the success mantras of day trading.
This can’t be stressed enough. Apart from learning the necessary trading procedures, you have to keep yourself abreast of the latest stock market news, the economy, global markets, etc. Do your homework before you jump into the game. Check out the financial sections of newspapers or bookmark a few financial sites and check them out religiously.
Decide how much money you can invest
Start by setting a particular amount in your trading account. Warrior trading, one of the most active day trading communities, states that you can start with as little as $1000 while testing the waters.
Once you have set up your capital, the next step is to decide on the amount you’re willing to risk on each trade. The rule of thumb here is that your risks should be less than 1-2% of the capital. Also, it’s a good idea to set aside a surplus fund, that you are willing to take bigger risks with.
Allocate Time for It
While it’s possible to day trade along with your day job, you need to dedicate some time to it. As a day trader, you have to track the markets, keep an eye on opportunities and move fast, once it arises. So, it’s essential that you’re able to allocate a fixed time during trading hours.
Begin with Small Steps
As a beginner, it’s quite natural to feel overwhelmed with the entire process. To avoid this, experts suggest that you start by focusing on one or two stocks initially. With a manageable number of shares, tracking and finding opportunities becomes easier. Follow this strategy till you get the hang of things.
Patience is a virtue
While it may seem contrary, successful day traders are the ones who are patient. They may be tracking the market every day, but it doesn’t mean that they trade every day. They don’t make the mistake of trading when they come across an opportunity that doesn’t meet their criteria. Don’t buy just because you have to something. The point to keep in mind is, “Plan your Trades, then Trade according to your Plan.”
Don’t miss out on Opportunities
Very often, novice traders make the mistake of missing out on opportunities because they are scared to click the “order” button. If you’re disciplined and have been watching and timing the markets, then you should be able to grab an opportunity, as soon as it presents itself. There’s nothing to fret over, even if you’re wrong, as its all part of the learning process.
And, finally, Choose the Right Trading Platform
The right trading platform can go a long way in helping you succeed. Online reviews are an excellent way to know more about a trading platform before actually trying it. For instance, if you’re planning to use the Warrior Trading platform, check out Warrior Trading Review to get an idea of what other users have to say about it, before taking the plunge.
The Bottom Line
There are no shortcuts to attain day trading success – you need to cultivate your skills and learn the nuances before you can taste success. With that said, the right strategies and tools, you can improve your chances of beating the odds, and gain huge profits.