How not to lose your shirt when Day Trading – It takes a certain type of person to make money day trading in the stock market. Ultimately, the vast majority of people end up losing their account balance and decide that trading isn’t the life for them, and instead choose a safer career.
That’s not to say you can’t learn how to successfully day trade in the stock market though.
Sure, there are some people who may just have a natural talent for this type of business, but for every one person who is some kind of day trading genius, there are ten people who became profitable through learning the necessary skills, hard work and determination.
In order to make money in the stock market, you need to gain an understanding of how to analyse the technical aspects of stocks, as well as spending many hours of your own time looking at charts and keeping on top of the latest financial news.
At the end of the day, this type of lifestyle isn’t for everybody. Most traders really enjoy the hustle and bustle of the stock market, with new trades being made every few minutes, and money being constantly gained or lose.
It’s exciting and gives a lot of people a rush, kind of like gambling.
However, there is not many people who are prepared to put in the extra work that it takes to ensure success. Being able to spend hours of your time researching, and then sitting in front a computer day after day, even when things are going wrong, takes real commitment.
If you have the desire to make money day trading in the stock market, and you are committed to making it work, no matter what, then here are some pointers to get you on your way.
It’s very tempting to just want to jump straight into the thick of the action, and start day trading in the stock market as soon as possible.
Unfortunately, although this would the ideal situation, it’s not a very profitable strategy. In order to make money in the markets, you need the skill of being able to identify profitable trades, and this is something that doesn’t come overnight.
As any successful day trader will confirm, you should be able to instantly look at a stock chart and begin seeing profitable patterns within a few seconds. To get to this level takes dedication and work, but the end result is worth it.
Begin with learning things such as chart patterns and formations, and pretty soon you will start to develop a habit of noticing winning trades without really trying.
Another key point to successfully day trading in the stock market, is to choose a good brokerage firm who you work with on a regular basis.
Preferably, you should find a discount day trading brokerage firm, where you have access to lower than average trading commissions. This is very important, because many traders find it hard to make any significant money with high commissions eating into their profits.
Remember, day trading is all about making a high number of trades each day, so the commission rate you get from a brokerage firm is very important, and it’s worth taking the time to check around before making a choice.
Narrow your focus
If you are just starting out day trading in the stock market, then the variety of different trades available every single hour can quickly become overwhelming. That’s why it’s a good idea to narrow your focus and just concentrate on a few stocks at first.
The main advantage of doing this is that you start seeing the patterns on how these stocks move, especially if you stick with them for a few weeks.
Once you have identified these patterns, then you are in a better position to successfully trade the stocks and make money. This is a much better approach than trying to learn about thousands of stocks all at once. Remember, you should learn to walk before trying to run.
The winning strategy
One of the trusted strategies that has been proven to make money again and again day trading in the stock market, is to simply aim for making small percentage gains on each trade.
This means you are not going for the big wins, but merely looking to develop a simple plan that brings you predictable profits consistently.
Think about it, getting regular gains on your trades, although only on a small scale, quickly adds up to a larger amount, but with a method that produces less risk on your part than if you were to try and just go for that one big score.
This is the way that almost all elite day traders in the stock market approach things, and if you want to join them, then you should do the same.
Also, it’s important to make use of stop losses in your day trading strategy to minimise the amount of money you lose. Obviously, you can’t win with every trade, and when things go wrong it’s best to get out of the trade before you take a big hit in ID88 Link.
Watch your emotions
All of the above pointers will become worthless if you don’t watch your emotions while day trading in the stock market.
Have you ever made a decision when you were in an emotional state, only to regret it a few hours later?
This is actually how many day traders decide which stocks to trade. Once a few trades go against them they get angry and upset, and then spend the rest of day making rash decisions trying make up their losses.
Avoiding this kind of behaviour is essential if you have any notions of getting long term profits. You need to learn how to keep your cool under pressure even when things are going wrong.
Sometimes, it’s a good idea to get away altogether, and take a break from day trading in the stock market. You can come back tomorrow with a clear mind and free from any anger or resentment.