10 great day trading strategies for beginners
Day trading is the buying and selling stock throughout the day. Day traders are involved in business throughout the day to gain high profits. Traders also stand a high chance of loose value if stocks are horde. Most day traders are beginners, and they trade in the hope of growing their small daily profits into a long-term gain.
These purchases can be done directly through traders on an investment platform or brokerage. Not all brokers are meant for this lucrative business. Check out the best day brokers to work with. Fidelity and interactive brokers have some of the best experiences platforms that feature live streaming quotes and tools to allow you to navigate through with ease.
Here are 10 tips for day trade beginners
Have the necessary knowledge
Knowledge is key in any form of investment. Day traders need to catch up with the most current trends in the market by watching the news, attending events, and reading magazines. Do not rely on hearsay information, and half-baked knowledge will always land you in trouble.
Spare time for trading
Day trading requires more time than imagined. You are likely to coach on your screen to keep close track of the market state and spot opportunities. The market is fast-moving, and the only way through is to move fast.
Start with one or two stocks per session. Tracking and finding opportunities is easy with few stops. Consistent practice will allow you to gain experience over time. Recently it has become increasingly common to trade fractional shares allowing small traders to specify the amount of stock they wish to invest as low as 25$ in Amazon.
Avoid penny stocks
Unless you see real opportunities, do not engage with penny stocks, most of them are usually thrown out of the major stock market, and it’s almost impossible to hit the jackpot. They have lucratively low investment but are highly illiquid.
Aim on the profit
Make sure the risk to lose is of the lowest percentage. Most traders can make a profit of 50 to 60% of their investment. Aim on winning more than losing all the time to maximize your profit.
The stock market should be governed by logic and emotions. You have to train your mind not to be swayed by your thoughts. Greed, fear, and hope are some of the feelings you should get off your mind.
Stick to the plan
Every trader should have a strategy to aid them through, and the only way this strategy should be helpful is to stay disciplined with your plan. Successful traders move fast but do not have to think fast. Follow your plan instead of chasing profit and being led away by emotions.
Set aside the amount you want to risk in your investment. Most traders prefer 1% or 2% of their account per trade. This way, you do not risk all your eggs in one basket.
Decide on the type of order.
Decide on the type of order you use to exit or enter the trade. This can be either a market order or a limit order. Limit order guarantees the price and not the execution, while limit order help in precision trading where and when to buy and sell.
Time the traders
It’s hard for a new beginner to read the market trends as soon as trading starts in the morning. However, experienced traders know when to make good money. Take time to read the market trend first. Beginners should avoid peak hrs even though it offers better opportunities. Morning hours are more volatile than middle hours.