Day Trading Strategies for Beginners

Day trading is like starting a special career, there are a lot of things to put in mind, especially when you are new to it. Day trading is the process of buying and selling a financial instrument within a single trading day. It can also occur multiple times and in any marketplace, but most commonly in the foreign-exchange market, over the course of the day.

It takes the benefits of small price moves, thus, making it a profitable game. However, like any other game, it can also be so risky for novice and for those who don’t follow a well-plotted method. Day traders are normally refined and financially well-off. They use high amounts of leverage and short-term strategies in trading to capitalize on small price movements in highly-liquid stocks or currencies.

They look to take advantage of volatility every trading day, and lessen overnight risk brought by events, such as a bad earnings surprise, that might occur after the markets are closed.

Now, let’s take a look at some of the strategies that can guide in the right path as you start your journey in day trading. Learn how to day trade like a pro.

Make sure to prepare a target price before diving in

If you are planning to purchase a long position, think in advance how much return is acceptable, also a stop-loss level, if the trade turns against you. Afterwards, stick with your decisions.  This helps you to restrict your potential loss and keeps you from being greedy if price hits to an untenable level.

Be enduring

It may appear ironic, successful day traders often don’t trade every day. They may be in the market, at their computer, but if they don’t notice opportunities that hit their criteria, they will not trade that day. That is far better than going against your own best decision out of an impatient desire to just do something.

Be self-controlled

Remember that you have to prepare a trading plan and stick to it. If you are trading on your own, impulsive behavior can be your worst nemesis. Greed can affect you for too long and fear can cause you to give up too soon. Keep in mind that you don’t get rich in a single trade.

Use situations where demand and supply are extremely imbalanced as your entry points

If the supply is close to exhaustion and there remains investors who are willing to buy, the price is more likely to go higher. However, if there are still spare supply and no willing buyers, the price will decline.

Don’t be frightened to click the “order” button

Beginner traders often get paralyzed by analysis, because they get enfolded in looking at the candles on their screen and can’t move and decide immediately when opportunity suddenly knocks before them. If you are disciplined enough and you always work your plan, placing the order should be automatic. If ever you are wrong, your stops will get you out without major loss.

Day trading can be a difficult skill to master, it requires time, skill and discipline. The strategies mentioned above can guide you in developing profitable plans. With adequate practice and persistent performance assessment, you can greatly increase your chances of trading success.

 

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Written by bworldofficial

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