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If you’re looking to create a new income stream, becoming a day trader can be a great opportunity. Equipped with the right budget, broker and skills, it’s possible to start making money almost immediately. However, it’s not without risk – and if you want access to the best information and software available, you’re going to need a reliable, professional broker you can trust.
Look out for a broker with a good platform that does not charge excessive commission. Keep an eye out for specific tools that will help you make the right choices, including level II quotes, ladder trading, trade hot keys, stock alerts, direct market routing, streaming time and sales.
Once you’ve chosen a broker, you’re ready to dive into action – but be wary of doing too much too soon, you’re new to this game and trading with professionals who have more experience. Day trading requires you to invest both time and money, so set aside some time to assess what your initial capital outlay is going to be, and where you are going to find the time to dedicate to trading.
What to look out for
Once you’re ready to get started, you can use stock screeners on a daily basis to find stocks that are trading at a decent volume and volatility. Avoid penny stocks as they are often illiquid, and there are better opportunities in the market. Practice identifying upwards trends, and the points at which you want to enter and sell. This is the simplest way to start generating profits. Learn about profit targets, and how to ensure you’re getting the best price to sell at the best time.
Never stop learning
Knowledge is power, so find out as much as you can about the world of day trading. The stock market ebbs and flows according to the news of the day, so keep your TV tuned in to a news channel to monitor how global events are impacting share prices. Good news generally results in a bump in stock prices. Find successful day traders who offer tips on social media and follow them, read blogs on the topic and listen to podcasts.
Uncertainty and instability increase volatility in prices and makes them more likely to drop. There is an abundance of resources online where you can learn the tricks of the trade and get the most up-to-date information.
Avoid common beginners’ mistakes
Most people who start trading are too loose with their money to begin with, and can lose a lot of their opening investment for this reason. A big loss in your early days as a trader can dent your confidence and motivation. It’s smarter to be more cautious in the beginning. Start slowly and with smaller amounts until you have more knowledge, information and confidence. Spend as much time as you can educating yourself and empowering yourself to succeed.
Choose your broker wisely, and make sure it’s a trustworthy organization to place your money with. As you gain experience, your confidence will grow and so will the volume and dollar amounts of your trades. Over time, you should start to make a profit consistently, bringing a lucrative new revenue stream into your life.