Before you start day trading, you need to be prepared for what can come up. Having the right day trading software and a firm grasp on the basic rules is the first step. When you actually start day trading, you’ll be surprised by what can arise. Know what you’re getting yourself into and fully prepare yourself by reading these helpful tips.
- Keep calm and be ready to be risky.
There are safer ways to make your money grow. If you’re too scared to take risks, then you’ll need to fortify your nerve before you day trade. You won’t be able to anticipate every little detail in the market, so just control what you can. Don’t be afraid of miniscule (or large) losses of profit—and when you’re starting out, get ready to lose. - Prepare yourself to fail.
This isn’t the most encouraging tidbit, but it rings true. Day trading is an art that must be perfected over time, and you won’t see large profits as you start out. Don’t be discouraged if you’re actually losing money in the beginning—you’ll learn as you go. Mentally brace yourself for losses, and when you fall, pick yourself up and try again. - Play by a strategy.
Pick a trading system that dictates the stocks you follow and the way you buy and sell. Then stick to it. Don’t be swayed by the opinion of others. - Count your wins and losses.
A great way to measure the success of your strategy is by keeping track of your results. Keep a record of your profits and your losses, and if you don’t like what you see, look at alternatives. It’s okay to decide to go with something else, such as an index fund. - Trust the market.
It’s a good idea to follow the news, but remember who—or rather what—is in charge. When it comes to day trading, the market is your ultimate authority. Don’t act hastily on a hot piece of news. Follow the market’s lead instead. - You’re not at Vegas, so don’t be a big gambler.
Let’s say you’ve been day trading for a little while, and you find yourself getting in a good groove. While you may be tempted to follow a hot streak and put even more effort (and money) into day trading, you shouldn’t do so without careful consideration. Keep a nice portion of money away from day trading and invest it safely, and when you want to devote more of it to day trading, do so in small increments. - Buy low and sell high.
This is tired a true advice. Timing is important and so is hedging your trades. Buy a stock at low price and hold onto; you may be worrying about whether or not its price will increase, but a bit of patience will pay off. You don’t want to sell your stocks too soon.
