Day Trading for Beginners – Are you finally ready to step into the world of day trading?
If yes, it is essential to avoid the mistakes which most beginners make. Today, we will share five tips that can make day trading for beginners quite lucrative. You can prevent the most common mistakes and also the most common causes of losses when it comes to day trading.
That is why it is essential to not only go through our guide below but also stick to it during trading so that you can make money rather than losing it.
1. What’s the Right Market for You?
First of all, you have to take the right asset class:
You have to observe these markets for a while and determine which one you want to step into. These markets are highly liquid and can be traded online.
The choice of the market would depend on:
Day Trading For Beginners: The time you need to devote to trading…
If you want to trade after-work, you need to choose asset classes that trade round the clock. It means that you have to stick to either stock futures or leave out stocks altogether.
All the other asset classes trade round the clock. That is why; time which you want to devote to trading determines the asset class.
Zone in which you want to trade:
Did you know that you can trade globally in any asset class?
If you want to trade in London stocks or want to play on the British economy, you would have to trade according to British time.
Some brokers allow you to trade on any stock exchange around the world. The choice of your asset will be dependent on the zone in which you want to trade as well.
The strategy which you want to mimic:
These days, most traders opt for social trading. It involves mimicking other successful traders. If you plan to do the same as well, our platform will work to your advantage.
The choice of the asset will be dependent on the trader whom you want to mimic. If he/she trades in commodities, for example, you would have to trade in commodities as well.
The capital which you have:
The capital requirement on offer in certain asset classes is higher than others. That is why, depending on the money, you might have to skip out on some asset class. It is another essential factor that will determine the asset in which you trade.
So, the first tip which you need to follow is to pick the correct market. It is dependent on the factors highlighted above.
2. Get the right tools:
Before you step into the world of day trading, it is vital to procure the right tools and resources. We would highlight some of the tools and support which you would need.
- Hardware: In terms of equipment, the resources which you would need include:
- Reliable broadband connection
If you already have access to these resources, then there is no need to buy an advanced computer or high-speed Internet connection. Anything over 20 Mbps is a good Internet connection to work with.
- Online Resources: You might be thinking, what do we mean by online resources? The online resources which you need to procure are:
- Social trading platform (you can refer to our platform for the same)
- A reliable charting software
When you have access to these resources, you would be ready to trade. If you miss out on any of these resources, the probability of success reduces drastically. That is why; this is one of the most crucial day trading tips that you need to follow.
3. Manage Your Risk:
Many beginners ignore proper risk management. The problem in doing so is that a couple of negative traits can eliminate your entire account. It means that you cannot continue your trading career. There are a few rules which you always need to follow when it comes to risk management.
- You have to use leverage carefully. Initially, you have to take minimum leverage and only gradually increase it with experience.
- It would help if you always place the target and stop-loss levels while initiating a trade. It will allow you to trade in a controlled fashion.
- It would be best if you worked with a glitch-free platform that honors stop loss as well as targets.
- The amount of money which you can use on a single day if it hits the stop loss should be less than 5%. It will provide you with ample leeway to recover from the lost trades.
- When you follow these risk management principles, it will become easy for you to day trade profitably.
4. Pick a Strategy:
Most beginners think that creating a strategy is easy, and therefore, they try to create one themselves. The problem is that it can take years to test it out and remove the loopholes.
Instead of developing and ironing out your strategy, which can take a lot of time and effort, it is better to follow a successful social trader. Our platform consists of hundreds of such traders having a good track record. It means that you can follow a tested strategy right away.
The advantage of doing so is that you can go through the track record of the trader and then take your pick. Once you do so, it is easy to initiate the trades.
Also, since our platform has a large number of such traders who post their trades publicly, you have plenty of choices as well.
All in all, when it comes to picking a strategy, social trading is your best bet.
5. Start with Demo Trading:
When you first start to trade, dummy trading is a good idea. Even if you’re following a successful trader, it is better to start with demo trading. It will allow you to test the trades by yourself. It will give you confidence regarding the strategy of the trader whom you’re following on our platform.
Once you have the experience of a few weeks when it comes to demo trading, you can switch over to live-trading. It will allow you to familiarize yourself with the platform and, after that, switch to “live trading”. Also, testing out the strategies ensures that you do not lose any money as well.
Therefore, the final tip which we have for you is to switch to live trading only after a few weeks.
Besides, you can use our platform for social trading, which will allow you to better your trading skills. So, instead of trading blind, follow the five tips above to increase your chances.