10 Effective Strategies of Day Trading For the Beginners

Day trading is a specific procedure of selling and buying of financial assets in a day or several times in the course of the day. If you play perfectly, grabbing the benefits of small price movements is a rewarding game. But it is always a risky game to play for the newcomers or anyone else who is not aware of the well-planned trade strategy.

Moreover, not every broker is well-fitted for making large volume of trade everyday by the day traders as well. You will find some brokers are specifically designed for day trader. While you are thinking of day trading it is better to look for a day trade broker who can assist you in every step of trading signals.

But during selection, you should look for someone who offers advanced platform versions equip with interesting features like advanced charting tools, real-time streaming quotes and lots more. But, before that you should know about the strategies of day trading. Read on this blog to know 10 effective strategies of day trading especially for beginners.

  1. Knowledge is the power bankKnowledge is the key to any trading processes! Apart from knowledge, every day trader should stay updated with the latest news of stock market. Even they should know about everyday’s events which can affect the stocks at the same time such as the economic outlook, the Fed’s interest rate and much more.Therefore, a basic homework is essential. Just make a note of the stock list on which you wish to trade and stay informed regarding the general markets including chosen companies. Business news must be verified by visiting trustworthy financial websites.
  2. Kept adequate funds asideBefore making an investment, evaluation of the amount or capital that you want to risk on the trade is necessary. Several successful traders risk only 1-2% of the respective account on every trade.Suppose you have a trading account of $40,000 and want to risk 0.5% of the amount per trade then maximum loss will be 0.005 x $40,000 ($200) per trade. Accordingly, calculate and keep a sufficient fund amount aside as the preparation to lose. Loss is not mandatory but it may or may not happen at the same time.
  3. Spare some quality timeDay Trading is the specific type of trading which needs much time. You have to devote most of the day time to it. If you can’t spare time then this trading type is not suitable for you!It involves a procedure in which traders are to be smart enough for tracking the market and grab the opportunities. As the market can spike anytime during trading hours, you have to decide and move quickly.
  4. Begin like a smallerBeginners must be emphasised on only a stock or two in a session. Looking for and tracking opportunities are much easier with the help of a couple of stocks only. Nowadays, it becomes much easier to trade fractional shares and thus you must start with a small amount of dollars for investment.For instance, if Apple’s share trading amount is $250 and you wish to purchase a share of worth $50 there are many brokers who will let you get 1/5th of it!
  5. Avoid stocks of pennyAs a trader, you will definitely look for low prices and deals, but it is advisable to avoid penny stocks. As these are not liquid, it possesses a high bleak threat to hit the jackpot. Certain stock trading are there below $5 share and only applicable for OTC (over-the-counter) trade.Furthermore, they are de-listed from the major stock exchanges at the same time. Therefore, you should perform an extensive research and invest only there is a real opportunity. Otherwise, it is better to stay away from these!
  6. Trades in those timesExecution of the traders starts and several orders are placed as early as the markets release in the morning! These contribute a lot in the volatility of the price! Only a highly-experienced trade player can recognise the patterns and able to choose the right time for profits.But as it will be really troublesome for the newbies it is recommended not to make any kind of move for initial 15-20 minutes. Just to go through the market in appropriate manner. The mid hours are not so volatile but trade movements become high once again during the last hours.As rush offers come with lots of opportunities, it’s always safe for the beginners to avoid the first initial hours.
  7. Reduce loss by limiting the offersAt first, the kinds of orders must be decided that you are going to use for entering or exiting a specific trade. Is it Limit Order or Market Order? If the Limit Order is placed, it will guarantee the price not execution. But obviously it helps in trading with much more precision by setting a realistic price both for purchasing and selling.With this, most experienced as well as sophisticated day traders impose the utilisation of options strategies that results in dodging their positions over time and as per requirement. On the other hand, if you go for market orders, you can receive execution of best prices with time. Certainly, there will be no guarantee of the price.
  8. Set realistic goals about profitsIt is not necessary that every strategy should be profitable in the end. It is all about continuing the trading rather profiting consecutively. Most traders profit only 50-60% of the trades. But, in contrary to lose on the respective losers, they gain much more on respective winners.Thus, before trading ensure that the risk associated to that specific account is limited to an extent only. Even check whether both exit and entry processes are precisely mentioned or not!
  9. Stay calm and coolWith investment, you are actually ready to face the risks of the stock market. Several times, it will tense your nervous system and check your impulsiveness too. Being a Day Trader, you must know the tricks to keep the fear, hope, greed and loss at your bay. But final decisions must be made logically rather than emotionally.
  10. Adhere to your set planSuccessful traders always act fast but they don’t decide as fast as they act. There is a strong reason behind this and it is the ‘pre-planned trading strategy’. Furthermore, they are committed to act in a disciplined way to follow the trading strategy no matter whatever the situation is!The best trading signals is to stick to the designed trading formulae instead of chasing the profit. It’s like chanting and following the business hymn- ‘planning of the trade and trading according to plan’.

While you are going to start investing in day trading, it is advisable to take the assistance of brokers. Technical Trading Signals is one such company from where you can receive the desired assistance for profitable trading and be a successful trader soon. You can also know about the smart tricks for trading as well.

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