Day trading can be a daunting task for many, and many traders have found their misfortune after throwing in their capital on a sour deal. However, strange as it sounds if one were to approach day trading with a few simple steps in mind before, during, and after a session, achieving a sizable profit can be surprisingly quick and easy. Below is our five day trading for beginners life hacks that can aid you and turn your day trading sessions in any platform into a profitable venture or at least keep you afloat when the market doesn’t seem to be doing well.
1. Create a trading plan
Before you even enter the market to start day trading, it is imperative to have a plan beforehand. Many traders start buying and selling assets out of gut instincts or from its underlying popularity without knowing what to do next after. No matter how confident you are with your day trading tricks, it is important to set up your guidelines to follow at all times. One of the simplest day trading basics is to keep in mind is to know how much capital you are willing to risk, your price for entry, stop loss, and your profit target.
2. Learn proper risk management
If you have spoken to fellow traders who have been successful, risk management will be one of the key aspects that they would prioritize. It is important to know that even the most effective trading plan can still be susceptible to running into losses. Therefore, proper risk management is essential to staying in the market without losing all your capital in one trade. The simplest of day trading tips is to practice proper risk management is to follow your trading plan by following your stop loss, profit targets, and more importantly, asking yourself how much you would be willing to risk.
3. Take advantage of moving averages
Moving averages is considered a bare minimum way, but it is still super effective for your analysis in determining market trends of a particular asset or instrument. This can especially be useful if you are new to reading charts and market trends as moving averages can hint at buying and sell signals as well as provide support and resistance levels.
4. Analyze the market in different time frames
When it comes to reading price charts, analyzing it in a single time frame may lead you to place bad trades in day trading options. It is important to not just look at the bigger picture but even the small increments and declines in an asset’s price movement. This can also go the other way around. A five-minute chart pattern can send a certain buy and sell signal, but if you were to zoom out and read the daily chart pattern, it might tell you a different story.
5. Preserve your mental capital
Day trading can take its toll, and many can find it stressful at certain times. Therefore, preserving your mental well-being is just as crucial as preserving your account’s capital. Many times, one may find themselves making a bad trade and have it get to them. Without proper focus and discipline, this may lead them “revenge trading,” where they would place more trades at random with no backing to gain back what was a loss. Of course, this often tends to push the trader into a downward spiral that often ends in more losses than before.