Day trading offers many opportunities to generate profits every day, yet only a sizable portion of the total day traders manage to make good profits consistently. What is it that others are doing wrong? Well, day trading is a dynamic field, and you’ll need to learn a lot to make your mark in this industry. In today’s scenario, an information overload is distracting and confusing many entry-level day traders about what needs to be followed and what should be ignored.
To help day trading enthusiasts, Kimberly Torres agreed to share some secrets that many successful day traders swear by. Considering you’ve just started day trading, Kimberly shared five day trading secrets, especially for beginners. Start with following these, and see your profit graph rising upwards.
1. Begin with One Security/Market
The trading world has many elements that can easily overwhelm a newbie. If you’ve just started day trading, you might want to try your hands in equities, bond futures, mutual funds, NASDAQ, S&P 500, blue-chip stocks, or some other security/market. A wise decision will be to start with “one” thing at a time. As time progresses and you start understanding the trading world’s intricacies, you can diversify your portfolio and start venturing into newer markets.
2. Set Realistic Expectations
Making money from day trading is not as easy as some online gurus have made many believe. If you enter day trading having vague expectations in mind, you’ll not last long in this trading game. Talk to active day traders to get a real-world view of the trading world. Inputs gathered from professional day traders will help you develop the right trading mindset, which will eventually help you make the right trading decisions.
3. Become Good at Risk Management
Risk management is a skill that you must learn over a period. To trade profitably every day, you need to have a robust money management system in place. Else, you may end up being broke by the end of your first trading month itself. According to Kimberly, beginners should never risk more than 1% of their total account balance on a single trade. Always spend some time working on the figures before you start trading for the day.
4. Keep a Well-Organized Record
Having a detailed tracking spreadsheet with entry & exit points, profit/loss made, and other significant data can be used to analyze your performance over a period of time. You can use this spreadsheet to identify gaps & address pitfalls to reduce losses on the next trades. It may be tedious for many, but it can prove to be a game-changer in the long run.
5. Be Mindful of the Market Timings
A common mistake that some traders make is with regards to adjusting their work hours with the market timings. Just as people working in trade markets worldwide operate in different time zones and working hours, the same is the case with global trade markets. For example, if you start your day trading at 11:00 ET to trade on the CAC 40, you’ll already miss the best entry positions that will ultimately minimize your profit for the day. To avoid such petty mistakes, adjust your work hours according to the market timings you’ll be trading on.
Besides the five points shared above, also give enough time to hone your decision-making skills. Day trading is a high-pressure game that is undoubtedly not for the faint-hearted. If you really want to make a decent living from day trading, start following the tips and tricks shared by professional day traders alongside leveraging your past learning. You’ll not begin seeing great results immediately, but eventually.
Kamalpreet Singh
Working as a freelance contributor for several news platforms over the years, Kamalpreet has a well-thriving interest in the education sector. Kamalpreet heads at the post of editor at BO Herald and he contributes his knowledge and expertise in reporting Education News.
