July 24, 2024

Business Bib

Business & Finance Blog

Day Trading Strategies for Beginners

3 min read

 

An act of buying and selling a financial instrument multiple times during a day or within the same day is called Day trading. If played correctly, it can get extremely lucrative to take advantage of small price moves, however it can get dangerous for fresh traders or anyone who is not able to follow a well-planned strategy. Besides, not all traders are apt for handling high volume of trades done by day traders.

However, a number ofpopular online brokers like Glenn Neeley, have advanced versions or professional versions of their platforms which highlight advanced charting tools, real-time streaming quotes, and can punch in and modify complicated orders in instant sequence.

Some generic day trading tips are mentioned as under:

Basic Day Trading Tips

  1. Knowledge is Power

Apart from the knowledge of basic trading processes, day traders also need to be abreast on the updated news of the stock market and various incidents happening around which can affect stocks. For example, interest rate plans of the Fed’s, the economic outlook, and so on. So the best thing is that you must do your research well. Create a wish list of stocks where you would like to trade and also keep yourself well-informed about the general markets and selected companies. Also make sure to scan business news and also visit websites related to finance and markets. 

  1. Set Aside Funds

Find out how much capital you are eager to risk on every trade. There are a number of successful day traders who risk much less than 1% to 2% of their per trade account. You can always keep aside a surplus amount of funds which you can trade with and you are prepared to lose. Always keep in mind that it may or may not happen.

  1. Set Aside Time, Too

Besides, make sure you are setting aside time as well as day trading needs your time. This is the reason it is known as day trading. In fact, be prepared as you might need to give up most part of your day. Do not even consider day trading if you have limited time available during the day. The procedure needs a day trader to track and spot the opportunities in the market, which can come at any time during hours of trading. The only key is moving quickly.

  1. Start Small

As a beginner in this domain, you should focus on a one to two stocks at the max during a session. It is easier to track and find opportunities when you have just a few stocks.

  1. Avoid Penny Stocks

In case you are looking for low prices and deals make sure you maintain distance from penny stocks. These stocks are usually illiquid, and odds of hitting a jackpot are generally bleak. Many such stocks that are trading under $5 a share happen to de-list from major stock exchanges and are only made tradable over-the-counter (OTC). As per Glenn Neeley Unless and until you see it as a real opportunity and you are through with your research on these, simply stay clear.