Day trading is an act of buying and selling financial instruments within the same day. A trader can perform day trading multiple times over a course of a day. But to do that he needs to keep a check on day trading indicators and follow the following strategies.
Gain as much knowledge as possible
In the world of trading, knowledge is power. You can make anything possible only if you have knowledge about it. As a beginner in the world of trading, you must have knowledge of the basic trading procedures. Also, as a day trader you must also keep up on the movements of latest stocks, know market news and events that can affect stocks. These events can be the economic outlook, Fed’s interest rate plans etc. So you better do your homework well and keep yourself informed about the general markets and companies.
Set aside funds
Next strategy that you need to consider for day trading is setting funds aside. The trader must be capable of assessing how much capital investment he is willing to risk each day. With a proper knowledge of profits and loss, a trader can make such decisions. Most of the successful day traders risk around 1% to 2% of their accounts on every trade. Therefore it is advised that you set aside this surplus amount of funds that can be used for trading. You can never guarantee a profit in the trading industry. So invest an amount that you are okay with losing.
Taking baby steps in the world of trading can take a trader big places. As you start trading, always believe in the saying, ‘slow and steady wins the race.’ You need to focus on a maximum of one or two stocks at a time during your initial days. Tracking and finding opportunities is easy when you have less stocks. Once you become professional and confident about those two stocks, you can expand your techniques later. Within the past few months, trading through fractional shares has become quite common. You need to invest smaller dollars for better interests.
Time those trades
Mornings are the best time to place orders. Most of the investors and traders do that during the day time as that’s when the chances of execution are higher. And this is what contributes to price volatility. Also because it is hard for newbies to recognise the patterns and pick appropriately to make profits, the beginners should just read the market without making any move for the initial 20 minutes. The middle hours of the day are usually less volatile. It is the end of the day that offers rush opportunities. It is essential that beginners avoid all such hours.
Being a trader does not mean you will only experience profit. You need to stay realistic about profits. Not every strategy you apply will make you win. There are traders who win only 50% of their trades. But they still manage to make more when they win than lose on their losing days. As you trade, keep the risk on each trade limited to a specific percentage. The entry and exit methods should be well defined and planned for a positive trading practice.
The best advice that beginners should take is considering day trading indicators. Indicators can be a great help to dwell into the world of trading.