Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
Day Trading Tips for Beginners
Guest Post | Jun 18, 2021
Day trading was hugely popular back in the 1990s but its popularity waned with the turn of the millennium. Now, it's starting to make a comeback in a big way, with more and more people taking an active interest in these unique forms of trading. Some hope to use it as a side hustle for a little extra money on the side, while others hope to turn it into a career or make enough money to live from.
Whatever your dreams and aspirations for day trading happen to be, it's important to take some time, learn about your options and risks, research different strategies, and find all the help you can get before you get started. Becoming a successful day trader isn't something that happens overnight, but with patience and hard work, along with strong stock market analysis and strategy, you can get there.
The More You Know
The first tip to get off to a good start with day trading is to be willing to learn. As stated in the introduction, this isn't something you can rush into and succeed at without any planning, preparation, or education, and there are a lot of myths about day trading you need to dispel before you start.
Many people are drawn in by the allure of instant profits that are associated with day trading, but this method, like any other trading method, requires patience, skill, and hard work. You have to take the time to learn the basics, look online for guides and tutorials, educate yourself on strategies, etc.
Stay Up to Date on Stock Market News
As well as educating yourself on the ways of day trading, you also need to keep up with stock market news and updates connected to the companies you're interested in trading with. After all, a lot of day trading strategies are based around volatility, and you need to know what's going on with companies and markets in order to spot volatility in the first place.
No matter what sort of strategy you want to try, you need to keep yourself informed and up to date on economic outlooks, stock market updates, events that might affect the stocks you care about, company information on the stocks you trade with, and so on. Find a few good sources of business and financial news you can rely on.
Manage Your Funds with Care
A big part of being successful in any kind of trading is knowing how to manage your capital. Too often, people risk too much or invest inconsistent amounts, leading to a lack of consistency in their results. Or you might make the mistake of chasing losses or risking too much on a single trade.
You have to be really careful with your cash, only investing whatever you're willing to lose and setting yourself rules for investment amounts. For example, a lot of day traders only invest 1% of their accounts on each trade. So if you're starting off with an account of $10,000, this rule would let you put $100 on each trade.
Be Prepared to Put in a Lot of Time
Even though day trading can be a successful side hustle, you'll need to be willing and able to put a lot of time into it if you really want to see success. It's not necessarily something you can do for a couple of hours a day if you hope to see real returns. You need to be willing to dedicate most of the day to it.
Volatility and good buying/selling opportunities can arise at any time of day and may appear and disappear at a moment's notice. The more time you're online monitoring the markets, the more likely you'll be to spot these opportunities and take advantage of them.
Start Small
A good method for beginners when it comes to day trading is to start small. There's no need to rush in and confuse yourself with too many different stocks. Try to pick just one or two stocks to focus on over the course of your first sessions.
See: Fintech Trends to Watch for This Year
It's a lot easier to spot trends and opportunities if you only have to keep your eyes on a small amount of stocks, as compared to managing lots of different stocks all at once. Start off small like this and gradually build your way up to more advanced day trading.
Final Word
Day trading can bring you a lot of success and money, but you have to be willing to start slowly and patiently, putting in the requisite time and effort to learn the systems and spot the opportunities. Follow these tips to get off to a good start.
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Amazing tips. To Become a trader you should have knowledge about trading and market research. Market research can help you to find out which Catagory of trading will best for you