Organized Guide to become a successful day trader

By siliconindia  |  Monday, 25 January 2021, 12:49:53 PM IST

Organized Guide to become a successful day trader

You might be an active soul who is always looking for opportunities to flourish your skills and make some profit out of it. You have come across many articles and videos regarding trading and now you are feeling quite interested to try out your luck in trading. well, there are many like you who are participating in this trading platform influenced by the media. But in most trading doesn’t become their main source of earning rather it becomes a side profession. At times, traders in the United Kingdom tend to enter and exit a trade within a single trading day and don’t trade on a long term basis. We call them day traders.

Now there is more today trading than just trading within a day. So, you first need to know who is a day trader.

Day trading

Day trading is a form of trading where investors tend to buy and sell their stocks within a single day over small price fluctuation.

Now, it is needless to say that a trader who invests in day trading is called a day trader. 

Day traders usually don’t invest much in their trading as they don’t want to take risk of losing their capital. Since the price fluctuation in a day is pretty small and negligible, the risk amount also becomes less. So does the profit amount. So, the traders not only have low risk but also cannot make big profits out of it. Therefore, if you are dreaming big while day trading you should be aware of its shortcomings as well.

Day traders usually tend to adopt new strategies to increase their profit amount. They tend to follow the market psychology that can affect the trend to accelerate and create scopes of profits. However, you can never forget that there are also some disadvantages of day trading.

So, you must remain aware of them as well.

Pros of day trading

  • Since the trade ends within a single day, it doesn’t get affected my overnight trend reversion due to various trading factors. The economic indicators and supply and demand has comparatively less influence in this trade.
  • One of the best parts of day trading is that you can use a tight stop loss point to protect you from extreme losses. And for that, you must use advanced platforms like SaxoTrader. Learn the premium features of Saxo Bank before you start considering trading as your fulltime profession.
  • As the risk of losing is comparatively less, it is a great practice source for new investors before they start long term trading.
  • Here, trading term ends easily and you can quit any moment after a trade ends.
  • It comes with the opportunity of greater leverage.

Cons of day trading

  • Since the trading is done daily, investors also need to pay commissions to the brokers frequently. So, it becomes a bit expensive than other trading methods.
  • You do not get the proper amount of time to realize a profit before you close the trade.
  • If a margin is set for financial purposes while day trading, it can give rise to the number of losses made in a trade.
  • The most important is that the profit made here is very little in amount and does make much difference for a trader.

Therefore, to be a successful trader, here are some tips that you can follow while investing as a day trader.

  • Always try to assess yourself as a trader on regular basis. 
  • Always try to learn from whatever source you get.
  • Arrange a sufficient amount of capital to generate profits.
  • Market analysis is very important in day trade. So, never sulk when it comes to a market study.
  • Adopt new strategies and find out how other trader works.
  • Follow a trading plan and maintain a trading journal to note down your trading records.
  • Follow money management while trading.
  • Try to control your emotions while trading.

A day trader can face many problems while trying to survive in this trading platform. So, make sure you have the right mindset and motivation before you jump into trading.

ON THE DECK

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