If the idea of stock markets, research, and analysis of that research excites you, day trading is for you. Entering the world of trading is simple but sustaining is difficult. I have dabbled with stock trading quite a bit in the last few years and, in hindsight, understand the different ways in which I could’ve elevated my game as a beginner.
But fret not. If you’re a beginner wondering how to go about day trading, here’s a list of best tips you can follow for day trading as newbies or beginners.
Research is the name of the game. If you want to invest in the stocks of, say, three companies, you’ll need to keep yourself updated on its price trends, news around the company, its CXO level employees, and in general, about the sector. This is because all of this affects the prices, and it’s necessary to do thorough research before investing in a stock.
Since you’re a beginner, you must be pretty excited to invest and trade in your favorite stocks. But don’t let that excitement get the better of you. Start small. Leverage minimum funds to engage in a couple of trial and error trades in the stock markets. This way, you can test the waters, get the hang of it without losing any money.
Furthermore, to begin with, you can sign up yourself with online trading brokers such as Exness Broker, who can facilitate the trades for you. It is important, however, to do your research on them before starting out. You can know all about them by clicking here: Exness Broker Review.
It is essential to set aside money that you want to use for investing. Ensure you don’t use money that you need for other purposes. Set up a budget to keep a 1% to 2% margin for losses that you might face per trade. Furthermore, assume that this budget/money will never return to you because you never know with stocks, right? Now plan everything accordingly.
In day trading, the market is usually volatile after it opens for the day. Since you’re a beginner, try to wait, observe the market, see the trends, and post noon invest your funds and hold your position based on how the market has performed so far.
With market orders, you will get the best price available in that instance of time. However, with limiteded orders, you can provide the specific price at which you want to sell the stocks. Using Limit Orders, you can save money by trying to have zero loss since you’re already deciding a well-researched price at which you want to sell.
It’s anyone’s fantasy to hit the jackpot after buying loads of penny stocks, but real day trading doesn’t work like that, and your chances are pretty bleak. Companies with penny stocks tend to be removed or delisted from exchanges and cannot be invested or traded from major stock exchanges. Thus try to avoid these stocks.
Set Realistic Profit Goals
You can’t gain profits from every trade that you make. Realistically not all your trades will end up with you making profits. But the volume of profits must be more than the volume of losses.
This one isn’t exactly a strategy but perhaps the most crucial tip for day traders. Do not be swayed by overwhelming emotions while trading. It is important to know what things you should pay attention to while trading and what you should not.
So keep your calm while trading and make decisions aligning with your goals. With these simple day trading tips, you can now debut into the world of exchanges and begin trading.