Do you know how to make money day trading? Many aspiring investors find day-trading as the ultimate dream job. It only takes a few hours of your day, and the plus side of it all is that you can work anywhere you want as long as you have an internet connection.
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How to Make Money Day Trading
- Here’s some simple steps on how to make money day trading:
- Study: take a day trading course to help you learn the nuts and bolts.
- Practice: practice making a few hundred trades in a virtual account.
- Plan your trade: make sure to plan your entries and exits before each trade.
- Trade your plan: make sure to stick with what you feel most confident in.
- Limit risk: cut your losses quickly if the trade goes against you.
- Be realistic about your profits: take your profits and don’t get greedy.
The perks of this job are far and wide and retiring before reaching thirty is among them. Great things take time, and this is not different in day trading. You need to take the time to learn how to make money day trading.
A lot of people usually find it hard to master the practice as well as the discipline to undertake this craft. You cannot call yourself an excellent day trader by just hitting some home runs.
You are far from an exceptional day-trader if you keep on chasing all hot stocks. But don’t beat yourself up; with the appropriate experience, mentors and equipment, you can make money day trading.
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What Is A Day Trader?
The ultimate question remains,” What exactly is day trading?” Well, this is the buying or selling of stocks on the same day while you hold no positions at night.
Some experts would go ahead and incorporate other techniques like swing-trading, but it all goes down to opening and closing most trades in the same session.
Most day traders always try to predict a shift in prices before they happen. A trader would require to have strategies like technical analysis that would help him or her know when there would be a shift in prices. Check out our live trade room to see technical analysis and how to make money day trading in action. We offer many different trading styles in our room so there’s something for everyone!
Practical Steps to Follow to Have an Edge Day Trading
If you wish to know how to make money day trading, you must follow five practical steps that will give you an edge to become a day trader successfully. Why? A few reasons.
First is taking time. Just like any other thriving career, you will need substantial knowledge of the topic so that you can practice any craft. This is the same in this industry.
You must take time to learn everything concerning the craft so that you are in the best position to successfully execute the craft.
During this period, you have to grasp knowledge in various strategies like momentum-trading, bull-flag trading, reversal-trading, pull-back trading, and breakout-trading, among others.
You don’t need actually to master them all, but you need to know some basic information regarding each strategy so that you can prevent over-trading.
Thirdly, it’s prudent to practice the art on paper before you go ahead and do it on the real. Hence, the next step that will put you in the best position to make money is paper-trading before live trading.
The practice will help you to tune in your emotions. During this period, you will be able to create a trading plan and learn to follow it up to the latter while using your favorite strategies.
It’s during this time that you will identify which strategies work for you. There are simulators that allow a day trader to test out different strategies in various market conditions without losing real capital.
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Fourthly, you must set achievable expectations. Don’t think about making money, but think about losing the funds you already have. When you finally scale and start to live trade, it is always advisable to always start small as you scale up.
For example, as a newcomer, you can start trading with 200 dollars as you work your way up to 800-1000 dollars. You have to keep in mind that small wins are better than home runs.
Not to mention the fact that they reinforce the need to follow and stay on your trading plan. Moreover, it allows you to consistently instill discipline, which is vital in the trading world.
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Fifth, and perhaps most importantly, is managing your risks properly. Honestly, this ability will make or break you as a trader. The idea here is to have the ability to ensure you suffer small losses only.
When creating a trading plan, you will set up a stop. Why? To ensure you get out of a trade before you lose your shirt. You should always get out of the trade if your trading-plan is not going as expected.
In fact, before entering a trade, it’s more important to know when you will exit as opposed to going in and hoping for profits.
A risk and reward calculator can help you to understand the art of risk management successfully. You’ll be able to understand what the risk-reward ration must be in each trade you partake.
You have to keep in mind that losses are bound to happen, and it is fine if the loss is according to your trading plan.
Finally, taking profits is the last step that you have to learn before you become a successful day-trader. Knowing when to take losses is not the only thing you will have to learn, you will also have to learn when to take profits.
When new dollars are flowing in, it may be hard to know when to close up your trade. A trading plan will come in handy at this juncture. In your plan, you have to indicate steps to follow when it comes to taking profits as well as setting a stop when making losses.
You have to follow up on your trading plan so that you can reap a lot of earnings in the long run. Please, do not be greedy, take up some profits and get out of the trade as everything is always unpredictable when it comes to this craft.
How Do Day Traders Make Money for Beginners
- Study: study 1-2 hours per day for several months until you’re comfortable
- Open a practice account: with a company like ThinkorSwim or IB
- Take the time to practice different strategies
- When going live, start small
- Avoid pump and dump penny stocks until you’re comfortable
- Plan your trade and trade your plan
- Cut losses quickly
- Be realistic about profits
- Never let greed control a trade. You never go broker taking your profits
- Know when to sell
Do you know how to make money day trading? Like anything in life, trading included, you have to take the time before you start enjoying the benefits of this craft.
Nothing comes easy, and with enough practice and discipline, you can successfully learn the art of being a day trader.
The good thing about this craft is that anyone can do it. If you have the zeal and are patient to educate yourself, then you will be on your way to becoming a successful day trader and make money while at it with the right stock training.