Day trading refers to the way you buy and sell a financial instrument within the same day. You can even do that multiple times in one day. And if you can do it correctly and well, you can earn huge amounts.
On the other hand, it can be a loss-making nightmare if you fumble with it and do it the wrong way. This means that one small imprudence or mistake may result to huge losses.
In order to help you do day trading better, we’ve listed down some quick but effective tips that will surely help you earn bigger money as you try to master the strategy behind day trading.
Keep Gaining More Knowledge
Learning never stops. This is especially true when it comes to day trading and the markets. No matter how much you already know about the Forex Market, there will still be news and movements that will surprise the nerve out of you.
Keep yourself in the loop for the latest updates and news with relations to the stock market. Among the most important updates that you should definitely follow are the Fed’s plans for interest rates and economic data that are released periodically by government arms.
Allocate Amounts
Before you start day trading, always assess and set aside the amount of capital that you are willing to risk on each trade. As a rule, you shouldn’t risk more than 1 percent of your account on each trade.
Set aside enough Time
Needless to say, day trading demands a huge part of your time. In fact, you can say that it can consume most of your day.
If you think you have very limited time to spare, it’s perhaps better to find a less time-demanding strategy. This is because day trading requires you to track the FHBC Demo Account and hunt for opportunities, which are sprinkled throughout the whole trading day.
Fast reaction time and enough time are keys to successful day trading.
Start with One or Two Stocks at a Time
Since you’re a beginner, it’s much better for you to settle and focus on a maximum of one to two stock trades during a day trading day.
Fewer stocks mean easier tracking and it will also let you hunt for opportunities much more efficiently.
Aim for Realistic Profits
Remember that a strategy, to be a profit-making one, doesn’t need to win all the time. Based on data, many traders who consider themselves profitable win only 50 to 60 percent of their trades.
What matters is that they have more winning trades than losing ones. You have to make sure that the risk on each trade is limited to a certain percentage of the account. You also have to make the entry and exit methods are well defined and recorded.
Stick to Your Plan
As we have mentioned, fast reaction time is important. But what’s more important is advanced planning. You don’t have to be rattled when you’re caught in a trade situation where you’re still going to think about your next move.
Make sure that you have planned ahead, and make sure that you stick with that plan. That way, you will develop the necessary discipline. Remember, discipline is much more difficult to get than one-time humongous profits.
