Day Trading and Intraday Tips for Beginners
Being a day trader can be a lucrative thing if you know what you are doing. However, it can lead to a series of frustrating loses if you set foot on the economy battlefield without the proper strategies. If you are pretty much decided on getting into day trading as a means to earn profit, follow these tips for success.
Learn from an expert.
Not all are born investors and despite how appealing the world of trading may be in terms of the gains, it can be very risky for a layman. If you don’t have any background in this field and the thought just occurred to you that you might be successful in being a day trader, you need to have an expert by your side. Having a human expert to teach you the tricks of the trade is better than simply relying on books and investing tools. If there are skills that an investor should have, it is having a strong intuition and a perfect sense of timing. Learning these does not happen overnight and practice with the right person is necessary.
Be sure you can afford to be a day trader.
Day trading will require you to have a risk capital. This is money solely intended for trade and you should bear in mind that you can lose all of it in one go. If you can barely make ends meet and can hardly pay your bills, look for another profit earning activity.
Don’t become too attached in a stock.
Day trading is very different from long term trading and you should always avoid having too much attachment in a particular stock. The duration of day trading and intraday trading is 12 hours and you have to have the mindset to let go of the stock shortly after you bought it. Know that things happen fast in the trading world and if you commit to your shares and refuse to let go when all the signs tell you to, is a big mistake. As a rule, hold on to nothing.
Invest in the right tools and equipment.
For those who are planning to be an online trader, you can’t let an obsolete computer and a slow internet connection dampen your gains. As an online day trader, you need to have state of the art equipment and a no-fail internet access. Your computer must be specifically designed for trade and should be very reliable. Get the best technical support money can buy. It will be to your best advantage. Whatever you do, do not scrimp on the trading tools. Remember when trading, things happen fast and gains can turn into losses in split second.
Never stop learning.
Anything that happens to you while trading is a learning experience. If you luck it out, don’t get too cocky and know that you might lose it at some point. If you are experiencing a series of losses, check what you are doing wrong and create a different game plan. Know that the current, real time market scenario is where it’s at and should be the sole basis of your decisions. When trading, do not stereotype and function on auto pilot. Think based on the current given.
Trust your gut.
The trading environment can be too overwhelming and all the time you have to stay centered and focus on the now. Learn to ignore the noise around you and shut the baseless rumors so you can listen to your gut instincts.
Be in the right trading form.
Trading should be considered as a sport. You have to have the proper mindset and you have to be well physically, mentally, and emotionally in order to make sound judgments. A stressful and emotionally bugged down trader is very likely to commit massive mistakes. If you are having a bad day, skip trading for a while and clear your head.
Always save a portion of your profits.
Good weather will not always be on your side when you are a day trader. There will be days when the momentum will be on your side and there will be days when you will feel like you are hit with an avalanche of losses. A good tip for any day trader is to save a cut of your gains. Avoid the urge to reinvest everything on the next day no matter how tempting it is.
Be familiar with the Seasonal Stock Market Cycle.
August, September, and October are the months when stocks fall. The same is true for the months of January and February. November and December are action packed months and is the period when everything picks up and dividends are at the highest. See also another alternative investments to protect your wealth from inflation.