Day trading: What are the best tips for beginners?
The fast-paced nature of day trading means that it’s not for the faint hearted, with profits won and lost over the course of 24 hours.
However, some individuals make very good money from this form of trading and if you are looking to fall into such a category, this article is for you. While we can’t claim to make you an overnight millionaire, by abiding by the following pieces of advice you can maximize the chances of reaping a profit from day trading.
Arm yourself with everything possible
If you are looking to approach day trading without any outside assistance, you should look to give up already. In short, this is a fast-paced and competitive industry; one where everybody is vying to make profits.
Ultimately, you need all of the help you can possibly get. You need appropriate software, such as the Meta Trader 4 demo account, while you also need the right guidance. You need to be fully aware of all of the events that might impact your trade, as well as any financial news which might make a difference as well.
In other words, start on solid foundations.
Avoid rush hours
It might sound a little retail-esque, but in the world of day trading there are rush hours which as a beginner, you should look to avoid. In short, as soon as the markets start to open, there is a wave of activity. Sure, seasoned traders are able to use rush hours to their advantage and make big profits. For the beginner, they are clouded with volatility, and this means that profit-making suddenly becomes difficult.
As such, make sure you avoid these hours. Stick to trading in the middle portion of the day and you will be given a much clearer view of the market you are investing in.
As a beginner, it can be very tempting to tap into all of those so-called reliable sources that are attempting to sell you tips. Well, hopefully you will already know that trusting these sources should be a definite no-no.
After all, if these sources were worth their salt, they would be utilizing their own tips for their own profits. The last thing you want to do is make a trade, and just not know why you did it. You need a thorough understanding of each transaction, otherwise you risk relying on too much guesswork.
Invest sufficient amounts of time
It might be classed as “day trading”, but don’t let this fool you into thinking that this isn’t going to be a major dent in your time. In short, you do need lots of time to invest in this form of trading. One of the biggest mistakes a lot of beginners make is that they think that transactions take seconds, and can therefore shoehorn the activities into an hour or so.
Suffice to say, it doesn’t work like this. You will have to study the markets even more intently, to see how they react over the course of a day and when you make your move.