Essential Day Trading Tips for Success

If you are new to the world of day trading, you might be really scared of what is going to happen to all of your money. Yes, day trading stocks, Forex, and more, can all be very profitable. Indeed, some people become filthy rich from this kind of trading. Yes, it is possible to make a killing on the market, and if you know what you are doing, the chances of making profits increases.

With that being said, the fact here is that there are many facets to day trading, many things that you need to be aware of and to do properly in order to see success. If you are a newbie who has never day traded before, there are many factors that you probably are not aware of.

Today, we want to provide you with 10 essential day trading tips for success. This way, you can feel confident every time you place a trade, and you can be reasonably confident that you will make money instead of losing it.

Get Educated in Day Trading

The first tip when it comes to day trading is to ensure that you have at least a basic knowledge base. This is not something that you can just do. It’s not like riding a bike where a couple minutes of practice turns you into a master. If you expect to be successful, getting a trading education is essential. No, you don’t have to take some huge master course, but a few tutorials to get you started are definitely called for.

Set Aside Trading Funds

Something else you need to do before you start day trading is to set aside funds. Folks, you should never risk money in the market that you cannot afford to use. This means not risking next month’s rent or mortgage payment. Set aside X amount of money to trade with, and don’t use any more. If you happen to run out of funds due to losses, don’t dig into your savings. It’s not worth the risk.

Make Time

Folks, this is called day trading because you trade during the day, and moreover, the most successful of traders spend all day in front of their computers. Now, you probably have a life to live, maybe you have a day job or maybe you have kids. Either way, the point here is that you should set aside at least 2 to 3 hours per day for trading. It does take some time to make money. You can’t expect to make profits if you only trade for a few minutes per day.

Test the Waters

In terms of essential day trading tips, one of the most important ones that we can provide you with is to test the waters and start small. Now, when it comes to stocks, you need a whole lot of money to trade, so this may not be the best way to go. However, you can trade Forex with as little as $25 or $50, making it the perfect market for beginners to get started with. If you are not 100% confident in your abilities, there is no point in trading hundreds or thousands of dollars right form the get-go. It’s just way too risky.

Avoiding Certain Markets for Day Trading

On that same note, as a beginner, you do really want to stick to Forex trading. The stock market is not only difficult to trade, but you also have to use a whole lot of capital to get started. You can always move onto bigger and better things once you have the basics down.

Timing is Key

In terms of day trading tips, something you should avoid is to start trading the second that the market opens. Sure, a seasoned professional might be able to spot good profit opportunities in the opening minutes, but it’s not that easy, and it’s near impossible for a beginner. Take 20 to 30 minutes when the market opens to perform analysis, and then get to trading. Moreover, for beginners, closing your positions at the end of each day is not a bad idea either.

Use that Stop Loss

Something that you should never forget to do, particularly in Forex, is to use that stop loss. A stop loss is a limit order which closes a position in the event that you lose a certain amount of money. For instance, if you enter into a trade with $100, you can set the stop loss so that if the value goes under $90, the position will close automatically, thus preserving the rest of your money.

Set Realistic Goals for Day Trading

One mistake which many newbie day traders make is to set highly unrealistic goals that just cannot be achieved. Sure, it would be really nice to make a 50% or 100% profit in a day of trading, which is technically possible, although super unrealistic. If you can manage to make 5% or 10% profits on a trade, or through various trades placed throughout the course of a day, you should consider yourself lucky.

Use Your Brain, Not Your Heart

When it comes to the most important day trading tips out there, something to keep in mind is that you need to use your brain to trade. Use your knowledge, analyze the market, and make rational trading decisions. Do not be impulsive and don’t rely on that gut feeling. Using your emotions to trade will not get you very far at all.

Stick to your Guns

When you trade, you should use a good trading strategy, or multiple strategies. If you are using a proven strategy, if a single trade loses, don’t give up on it. Stick to your guns and don’t run for the hills at the first sign of trouble.

Essential Day Trading Tips – Final Thoughts

The bottom line is that if you follow the 10 essential day trading tips as outlined above, you will have far better chances of success. This is true whether you are trading stocks, Forex, or anything in between. Stay tuned, as we will be providing plenty more free information on day trading, swing trading, and so much more!