Do you want to start day trading? Are you wondering where to start?
The aim of every trader in the day trading market is to make profits. However, you need the relevant knowledge to trade successfully.
Best Trading Strategies for Beginners
Here are some of the best trading strategies for beginners.
Acquire knowledge
To trade successfully in the day trading market, you require knowledge. As a beginner, you need to understand the trade setup that will be profitable and also know how to manage risk. For example, you can take The Two Hour Trade course which can help you to learn easy money trading strategy. The course provides knowledge to understand trade setup that’s profitable and how you can manage risks in the shortest time possible of less than two hours. It’s the best course for beginners and those struggling to find footing in the day trading market and make profits. The strategy is best used when you are trading with options and futures.
In day trading, the target is to make small profits by buying stocks and selling quickly. Now, this comes with risks that’s why you will need strategies to help you make informed decisions in trading and controlling risk.
Use a simulator
As a beginner, it’s best to start paper trading using a simulator instead of diving in using real money.
The simulator uses fake stock trades and it lets you experience how the day trading market works before using real money.The simulator can also help you to know how profitable you can be.
Start with an open mind
Not all day trading is profitable. You might also make losses given that day trading has risks. Have an open mind that you may lose the same way you may make profits. That’s why it’s important to only trade with money you can afford to lose. Don’t use your grocery money, you will end up hungry if you lose.
Have a strategy
A trading strategy will help to guide you on how to trade. You will know when to trade and when to exit in case of losses.
Therefore, before you start trading, have a strategy. It will guide you when you are trading and prevent you from making an emotional decision instead of a rational one.
Don’t be in a hurry to trade. Take your time and wait for opportunities that align with your strategy. If none is forthcoming then don’t trade.
Decide on the stocks to trade in
Which stocks will you be trading in? Not all stocks are suitable for day trading. Some of the characteristics to look out for in stocks are:
- Stocks that trade in high volumes. These are easy to buy and sell at any time.
- Volatile stocks. These change prices more often which makes it easy for you to trade and make profits.
- Familiar stocks. You should be familiar with the stock you want to trade in. Find out more about it, understand how it trades, and what triggers its rise and fall in price.
- Newsworthy. When a stock is newsworthy, more people know about it and are interested in trading in it. This makes it liquid and volatile for day trading.
Know when to trade
The best time to trade is when the stock is volatile and liquid. There are many theories on the best time to trade. However, studies have shown that most day traders do the trading when the stock market opens and in the last hour before it closes.
As a beginner, it’s good to determine the best time to trade based on your strategy and when trading opportunities appear.
Know how to manage risks
Day trading comes with the risk of losing money. It’s important to know how to manage risks so that you limit the money you can lose.
When trading, always do position sizing, to know how much you can lose if trading goes wrong. Determine the level of losses you can tolerate before selling. Also, determine at what point you sell after making profits.
