Day Trading Strategies for Beginnersby Kazi Tanzib Forex Trading Analyst
In day trading, strategies work differently than in other cases. So, in today's article, I will write about day trading strategy & disclose every detail about day trading strategy. But before that, I want to announce that LiteFinance is providing an awesome giveaway contest Called New Year Promo 2022. And in this contest, they are providing awesome giveaway gifts like iPhone 13 Pro Max.
Whatever, let's get right to the point-
- Knowledge Is Power
In addition to knowledge of basic trading procedures, day traders need to keep up on the latest stock market news and events that affect stocks—the Fed's interest rate plans, the economic outlook, etc.
So do your homework. Make a wish list of stocks you'd like to trade and keep yourself informed about the selected companies and general markets. Scan business news and visit reliable financial websites.
- Set Aside Funds
Assess how much capital you're willing to risk on each trade. Many successful day traders risk less than 1% to 2% of their accounts per trade. If you have a $40,000 trading account and are willing to risk 0.5% of your capital on each trade, your maximum loss per trade is $200 (0.5% x $40,000).
Set aside a surplus amount of funds you can trade with and are prepared to lose. Remember, it may or may not happen.
- Set Aside Time, Too
Day trading requires your time. That's why it's called day trading. You'll need to give up most of your day, in fact. Don’t consider it if you have limited time to spare.
The process requires a trader to track the markets and spot opportunities, which can arise at any time during trading hours. Moving quickly is key.
- Start Small
As a beginner, focus on a maximum of one to two stocks during a session. Tracking and finding opportunities is easier with just a few stocks. Recently, it has become increasingly common to be able to trade fractional shares, so you can specify specific, smaller dollar amounts you wish to invest.
That means if Amazon shares are trading at $3,400, many brokers will now let you purchase a fractional share for an amount that can be as low as $25, or less than 1% of a full Amazon share.
- Stay Cool
There are times when the stock markets test your nerves. As a day trader, you need to learn to keep greed, hope, and fear at bay. Decisions should be governed by logic and not emotion.
- Stick to the Plan
Successful traders have to move fast, but they don't have to think fast. Why? Because they've developed a trading strategy in advance, along with the discipline to stick to that strategy. It is important to follow your formula closely rather than try to chase profits. Don't let your emotions get the best of you and make you abandon your strategy. There's a mantra among day traders: "Plan your trade and trade your plan."
Created on Jan 28th 2022 05:14. Viewed 81 times.
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