Many beginner traders may find day trading extremely challenging. If you don’t fully prepare for day trading, you’ll lose a lot of money. It’s a very expensive endeavor if you don’t know how to day trade. So to avoid committing mistakes, you need to read these tips first.
1. Trade with a coach
If you want to learn how to play tennis, you hire a tennis coach. If you want to learn how to play golf, you hire a golf coach. It’s as simple as that. This is how you become a better trader. But of course, you need to work with an active and profitable trading coach. If not, how will you know how to trade properly? In order to be a winner, you have to work with winners. It’s all about duplicating success. Successful and profitable trading coaches can teach you tips and tricks on how to become a profitable trader.
2. Day trading starts at 9AM to 4PM EST
Day traders get in the market at 9AM and gets out of the market at 4PM. Traders who hold their stock overnight are not day traders. You have the option to be a swing, intermediate or long-term trader. Day traders get out of the market and are flat by 4PM.
3. Solid understanding of the stock markets
One thing you need to learn about is how to use stock market indexes to determine the performance of the different markets. This is just one of the many things you need to know because it influences stock price. When you’re unaware of these things, you could be trading on days or months that you shouldn’t be trading. You don’t want to trade during times and situations when you shouldn’t be trading.
4. Adequate Trading Capital
To become a day trader, you at least have to have $25,000 in your trading account. This is the minimum requirement for margin trading. However, if you want to trade expensive stocks at 1,000 shares, you also need to increase your trading fun.
5. Trading plan
Think of your trading plan as your trading bible but you were the one who created it for yourself. Every successful trader creates their own trading plan that contains their trading rules and so on. It is only through education that you could create an efficient trading plan. You may also develop a plan with the help of your coach. Not only do you need a trading plan but you also have to stick to your trading plan. Many traders who stray from their plan lose thousands of dollars in a day.
As you can see, you really need stock market education if you want to have a thorough understanding of all this. Creating an effective trading plan would be difficult if you don’t have stock market education. When you have no education, you won’t know how to protect your capital. If you don’t have education, you’d never know how the market communicates. And last but definitely not the least, you could get into all sorts of bad trades and lose your money without education. The stock market is an unforgiving animal. Getting education is the best way to prepare for it.