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10 Tips for Day Trading

 

Day trading is one of the most aggressive forms of trading as buying and selling of stocks and other financial instruments are done in the same day. When done well, they can yield relatively good income in just a day of transaction.



But as much as day trading could lead to millions of earnings, this type of transaction can also mean huge losses in an instant. Although there are smart indicators that can help you trade efficiently, there are unforeseen factors that can cost you thousands of dollars.



The following are things that every casual trader (home based, consumers) should know about day trading.



1. Day trading is not for everyone - The improvement of online trading doesn't mean anyone who can access day trading can be part of it. This is a very intense type of trading requiring time, patience, aggressiveness and a little bit of luck to excel.



2. Know the techniques - Smart day trading should always be practiced and they should at least follow one technique. There are various forms of techniques a trader can use (News, Trends, Range, etc) in order to determine the stocks that should be part of trading on that day.



3. Careful on stock picker software - Many online brokers offer software or application that will allow users to automatically pick stocks for day trading. The application may be smart enough to determine the trends but human intervention still happens which means everything the software advices should never be regarded as definite.



4. Do your own research - Because the software is just part of the popular tips that you can use for day trading, aggressive research should be part of the daily task of trading. The biggest mistake any trader would have is to carelessly pick stocks.



5. Success is rarely instant - Success in day trading in your first day or weeks is like winning the lottery. But that doesn’t mean you'll be on the losing end in your first day. Your day trading could be a gradual learning process until you can post significant earnings.



6. Opt for "Money Back Guarantee" Software - One of the best features an online broker could offer you is the money back guarantee on the success of their application. Just make sure you read the fine print to know the exact conditions that will lead to the refund.



7. Developing skills on penny stocks - Penny stocks is practically the younger brother of NASDAQ and other public trading platforms. Penny stocks are small companies that sells small amount of their stocks. Test your trading skills in penny stocks so that you'll have an idea on your trading practices.



8. Security in online trading - Online trading should be done in limited gadgets to avoid attacks. As much as possible, use only one computer for your day trading so that you can protect your information without scattering them in various computers. Attacks are very easy to implement in various computers and you never know the exact security measures of the computer you don't own.



9. Trust with brokers - Although finding a trusted broker online is challenging, a good way to know if your broker can be trusted is the consistent follow-up and feedback on your trading techniques.



10. Work with a familiar market - Always consider a market that's very familiar to your lifestyle. This will allow you to research better since you already have a good idea on the industry. Day trading is not a very simple task since there are too many factors to consider and your familiarity should help you have better trading decisions.





Read Next: 10 Foreign Exchange (FOREX) Tips



 

 

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