Day Trading Guide – Starting your day trading journey is not an easy task. Because there is a lot of misinformation about day trading, today, we’ll solve that problem for you.
The following day trading guide covers several aspects of day trading. Let’s begin.
1. Day Trading Guide: Find the Right Strategy
The first thing which you need to do is to select the right strategy. However, when you look for a strategy, you will find that there are hundreds of options available.
It cannot be obvious to choose one. Even when you zero in on a strategy, you will have to test it extensively. It can take weeks to do so.
A much better option is social trading. Social trading refers to mimicking other traders when it comes to trades. It will ensure that you can use the strategy which a successful trader is using. Our social trading platform not only has thousands of such traders but also displays their track record as well.
It means that it will become easy to choose the right trader. After that, you have to mimic the trades. You can automate the mimicking process as well.
Once you follow this tip of social trading, you need not develop your strategy. You can adopt a working strategy directly. Right from day one without having to invest time in procuring knowledge, you can get your feet wet in day trading.
2. Practice, Practice, Practice:
Whether you’re trying to master day trading or whether you’re learning any other skill, practice is essential. Only with the right training, you can get a grip over mimicking or choosing the right trader.
You might be thinking, what about the losses during practice?
The best way is to start demo trading. That way, you won’t be trading with real money. However, the entire platform, as well as the price momentum, will be mimicking the real one.
That is why it can be considered as simulation training. The more you do it, the easier it would be for you to get a grip on the day trading skills.
There is no shortcut to practice when it comes to day trading. You will have to spend a few weeks indulging in day trading. At the same time, demo trading allows you to practice without putting your capital at risk.
3. Money Management:
Without capital management, you are most likely to make losses even if you’re following a successful trader. While on our platform, you will be able to know about the various trades on offer, but still, the proper capital Management is a necessity.
You shouldn’t risk more than 5% of your capital on a single trade. Due to this reason, it is crucial to limit leverage.
Many traders make the mistake of opting for high leverage in greed for more profits. You need to understand that higher leverage means that higher losses as well if the trade goes against you. In that case, you would end up losing more than 5% of your trading account.
Once you lose more than 5% of your account, it will become difficult for you to recover that as well as get into profit. That is why two things which you need to keep in mind when it comes to capital requirements are:
- Capital allocation
Once you consider these two factors, it will become easy for you to allocate your capital.
4. Goal Setting:
Overestimating your skills is pretty standard among traders. The problem is, it leads to disappointment and can distract you. To avoid this problem, you should set goals in advance.
The goals would be dependent on factors like:
- The time that you have for trading
- The capital you have
- Probability of successful trades
- The strategy that you are using
Only when you consider those points, you can set the right goals.
5. Choosing the Right Broker:
Another critical step is to select the broker carefully. You have to find answers to questions like:
- What is the brokerage on offer?
- Since how many years has the broker been in business?
- Are the reviews of the broker primarily positive?
- Is the platform of the broker user-friendly?
- Does the broker have proper and responsive support?
- What leverage does the broker offer?
When you find answers to these questions, it will become easier for you to shortlist the right brokers and then choose one. Rather than experimenting with different brokers, it is better to find the broker depending on the answers.
Also, if you’re part of any trading community, you can go through the broker recommendations depending on the asset class which you are trading in our community. It will ensure that you can use the experience of others to find the right broker.
It will automatically help you in choosing the right broker without wasting time and money.
6. Mindset and Scaling:
This relates to point 4, Money Management.
Irrespective of the starting-capital you have, you have to scale up trades. It is essential to understand that to start; you will make mistakes. If you’re directly trading with your entire capital, there is a high likelihood that you might end up losing all your money.
On the other hand, when you’re trading with just a small portion of your money initially, it would become easy for you to learn from your mistakes and scale up your trade according to the risk management principles highlighted above. It will reduce your risk significantly.
It would be best if you remember that you are not looking for a single magical trade to get rich overnight. You’re looking to use day trading to make a consistent amount of money.
Therefore, even if you make less money at the start, it should not be a problem. The aim should be to make sustained profits. So, gradual upscaling is needed.
So, when it comes to a day trading guide, these are the tips that you need to follow. Our guide above will allow you to not only choose the right platform but get ready psychologically as well.
When your mindset and approach are correct towards day trading, the likelihood of making a profit is on the higher side as well.
Moreover, since you will be mimicking the strategy through our platform, it would become easy for you to execute successful trades.
All in all, this guide can certainly help you step into the world of day trading in the right way.