Did you ever wonder what it takes to learn basic Forex trading strategies? In case you are a beginner Forex trader, you should know what the essential techniques are. One of the most critical strategies one beginner trader should know is day trading.
Day trading represents the act of buying and selling a financial asset during the same day. It can also mean buying and selling multiple times during the day. Small price movements can be very beneficial if you know how to play the game right.
Otherwise, this type of “game” can be hazardous, dangerous, and expensive. You must be aware that not all brokers are well suited for high volume trades that day traders have made. That’s why traders need to check a broker review of each broker company to choose a quality one.
However, we would like to take a look at some of the primary day trading principles.
Invest in learning Forex trading – knowledge gives you the power.
If you’ve been into Forex for a while, you’d know that it’s not rocket science. What you need to do as a day trader is to learn the basic trading procedures to keep up with the latest important events and news in the stock market that affect stocks, the economic outlook, and so on.
We would kindly advise you to do your homework and make a list of your preferred stocks that you are willing to trade. Make sure that you keep yourself informed about the general markets and selected companies. Go to reliable and quality financial websites and scan all the business news you can find online.
Determine the amount of money you’d like to risk trading.
One of the essential tips for a beginner day trader is determining the amount of money he is willing to put at risk. It’s good to know that the most successful day traders usually risk not more than 1% to 2% of their account per trade.
For example, let’s say you have $40,000 on your trading account and that you wish to risk only 0.5% on each trade. The maximum loss per trade then gets to be $200. You can then set aside the surplus and trade it when you are again ready to lose it potentially.
Be patient enough – day trading requires a lot of time.
Whether you are a beginner or not, day trading always requires a lot of time. That’s precisely why people call it “day trading”. You’d need to spend plenty of time trading, so don’t consider serious profits if you have limited time.
Day trading is a process that requires traders to spot opportunities that can occur at any time. The key lies in moving quickly! Remember that well!
Start small if you are a beginner day trader.
If you are a beginner day trader, we advise you to focus on two stocks maximum during one session. It’s much easier to track and find new opportunities with a few stores. You can specify smaller and specific dollar amounts since it has become common to trade with fractional shares.
It means that if Samsung shares are trading at $350, and you only want to buy $150 worth, numerous Forex brokers will allow you to purchase 1/5 of a claim.