7 Easy Day Trading Tips For Rookies

For successful day trading, know the timing, start small, save a portion of the profit, know when to back off, avoid unnecessary risks & stick to your plan.

7 Easy Day Trading Tips For Rookies

Day trading has become one of the most widely popular financial market trading strategies. Today people are investing more in the day-trading business because of its lucrative returns on a short-term basis.

However, there is no full-proof method of making a profit, as there are various concerns about day trading. With that said, let’s take a brief look at day trading & how it works.

What Is Day-Trading?

Day trading is any business that involves buying shares of stock & selling that within a single working day.

However, there are no hard & fast rules that you can not hold positions of these stocks overnight. The general concession is that you sell the bought financial item on the same day to be a day trader.

Day traders scrutinize market price fluctuations & implement their strategies as correctly as possible. If you can guess the tide, the rewards are lucrative. However, the opposite can happen too.

You need to form an effective & decisive strategy to seek profit from slight market movements. Forex trading is also a type of day trading and to learn more about it, you can check out this Forex Trading: A Beginner's Guide for more information.

How Day trading Works

To start your career or switch to day trading, you need to make sure that you have the following features ready at all times.

These are the primary tasks that you need to check before getting into the actual battle. If you have an old PC, it won’t help much; instead, it may cost you big time by not performing efficiently at rush hours.

As technology is changing every day, your PC should support modern software to analyze the market better & implement your strategy.

Internet connection is a crucial factor for day trading. You need to remain current about recent trades at all times. Slow internet connection will make it difficult to stay informed about the trading platform. As a day trader’s business is about those slight fluctuations of prices, it can be of grave concern.

If the stock market is the battlefield, the trading platform is your arsenal. As a rookie, you get to practice your strategies & sharpen your decision-making skills before entering the real stock market.

Last, you will need to hire a broker that can facilitate your trading according to requirement. A broker can help you with a wide range of tools to better understand, judge & search for your potential stocks.

In return, they take a commission from you. However, if you conduct many trades daily & on large scales, a broker can cost you significantly. Try avoiding the cheapest brokers. Instead, invest in an informative, well-constructive one.

Tactics Of Day Trading

You can’t depend on your intuition while selecting which shares to invest in & which one to sell. Also, you shouldn’t put your trust in any specific stock without proper evaluation. That said, the below-mentioned strategies are effective if you are a rookie-

1. Plan

Most day-traders make mistakes by trying to be the jack of all trades. Instead of focusing on many markets, stick to one & your improvement skills on that market. Form a strategy of your own & keep evaluating for effective results.

2. Preparation

Choosing a suitable trading platform can help you with this. Keep mastering the simulated media until you are ready to take on the real thing.

3. Patience

Although you have mastered your strategy, you can lose at first & for a while. In such periods, don’t be disheartened. Instead, stick to your original plan, keep trying and monitor the market carefully.

Things To Consider For A Rookie Day Trader

1. Time Frame

As a day trader, you don’t need to keep track of all the dealings & price fluctuations all day long. Two peak hours are vital for stock markets. The first two hours when the market opens & the last hour before closing.

You can get the chance to secure the best deals at this time & buy/sell power-hour stocks. In these hours, the market remains volatile & you should cash on the volatility factor to make a profit.

2. Set A Limit

You shouldn’t risk it all, as day trading is not a poker game. Similarly, you won’t profit consistently. It’s all part of the learning. However, you need to make sure when to stop.

As a rookie, you shouldn’t risk over 1% or 2% of your capital investment daily. That means if you invest $50,000, you can afford $500 to $1000 loss per day. When you have crossed the limit, stop!

3. Study The Patterns

If you are after the penny stocks, you should learn the basics of identifying patterns. Penny stocks move up & down in patterns & overtime, the patterns repeat.

However, you need to study hard & put every effort into understanding these patterns. If you can find out the way, you can quickly tell when the price will bounce back again.

4. Save Some Profit

Day trading doesn’t require you to be active in the market throughout the day. Similarly, when you make a profit, don’t jump into reinvesting the profits. A successful day trader profits only at (55-65)% of his investments.

Although it’s lucrative to profit & again invest in growing your business & portfolio, the opposite can also happen. That said, you may end up blowing your account. Never take risks on deals that you can’t afford. It is the universal truth that you will lose, but to what extent depends on you.

6. Stick To Your Strategy

No matter what happens, stick to one particular strategy that you have practiced long. Don’t deviate or try anything fancy. Stick to the basics & have patience.

7. Begin With Small Stocks

For a day trader, knowledge is more important than making hefty profits. Always start small as a rookie. Keep track of one to two shares per session and assess whether your strategy is working.

Never go all in. Starting with small stocks will help you scale how much you are risking. Keep in mind that you are always learning & that’s the actual trade.

Final Thoughts

Becoming aware of the tactics of day trading is the first milestone. Staring day trading is easy. But if you want to continue, you need to invest plenty of time studying news, stock charts, etc. & form meticulous planning.

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