Day trading is simply a process of buying and selling stocks or any other financial instrument within the same day or numerous times within the same day for the purpose of maximizing profit. It is a legal business though very risky. Some day traders make several trades daily while others make one or two per day. The most popular day trading markets are forex, stock and future.
Whether day trading is worth venturing into or not has become a controversial issue in today’s world. Some argue that it is not profitable while others say otherwise. Some day traders swear to make a living off the markets. So while it is lucrative for some, it is non-profitable for others but the overall success rate is low. All you need to get started are computer, one or two monitors, a trading platform and data feeds. Day trading is not an option for people looking for a get-rich-quick business but there are important tips that can make one succeed in it.
Winning Strategies in Day Trading
There are different strategies you must know about day trading and put into practice before you can become successful in it. They include:
- Be updated – you should know the basic trading rules or steps and then be up-to-date with the latest news and events happening in the stock market. Read and browse about it as much as you can because knowledge is power.
- Little beginnings – start with a maximum of one or two trades in a day and then graduate to several numbers when you must have learnt how it works, how to find and maximize opportunities.
- Use your spare money – beginners should start trading with their spare money which they are willing to risk and can forfeit (you may or may not lose it).
- Make out time – you have to put in your ample time which is usually day time in day trading in order to track opportunities and then act fast.
- Proper timing – day trading has times that the prices are most volatile or less. Time your trade and avoid hitting at rush hours as a beginner because you have high chances of losing.
- Be realistic about profits – a particular strategy must not win all the time to be profitable. Many win only 50 -60% of their trades.
- Be consistent – the stock market may not always favour you but you need to keep greed and fear at bay. Use your logic and not emotions to take decisions.
- Discipline – success is impossible without discipline and this led so many into loss of money in day trading.
The act of mastering day trading is not a day job because it’s a little difficult. There is need to invest your time and skill. Although it has become controversial, many still indulge in it. The winning strategies listed above will greatly improve your chances of soaring against all odds.