What is Day Trading? Day Trading Strategies Beginner
27 Oct
What is day trading? What are the strategies best for trading?
This guide will help you with the best trading strategies if you are a new trader. Here are some simple steps to get through.
Here are some pros and cons of day trading.
What is day trading?
When a trader opens a trade and closes it on the same day, this technique is called day trading. You can still be a good trader and make money if you are consistent. It is more like making an ocean by collecting each drop of water. It is best for those who don’t know the long-term game but it has all the risks and needs careful watch and discipline.
Why day trading?
Even though day trading is a make-or-break still it entices many traders. But there are a lot of risks in it. Let’s have a closer look at it.
You can learn quickly
Since long-term trading spans over a long period of time so that one can get a better understanding of the choice for the specific period.
A good trader learns from his mistakes. A trader can know his trades on the same day whether right or wrong and can learn from his own mistakes. Sounds more like a crash course! Isn’t it?
Here are some of the rookie mistakes to avoid to save your account.
Low capital requirement
Brokers usually offer a high leverage since the trade lasts only for a day and is called intraday trading. If are from the US, you are supposed to maintain a minimum balance of $25000 for a day trade which is called the “pattern day rule”. But in forex trading, there is no such compulsion and one can start with even $50.
It’s an income, not returns
In intraday trading, you make a profit or loss on a daily basis and it is more like a second income for somebody and one can make a handsome amount of money if he is good at it. And like other businesses, it has a risk of going bankrupt too as it is in your hands and you are totally responsible for it.
If you are a beginner, here are some basic tips and tricks to do it better.
Prerequisites for day trading
To be a successful trader, certain things are required. The list is as under:
Ideal capital for day trading
Even though one can start with a $5 or $50 capital but still a handsome capital is still required and an ideal amount would be $500 if your lot size is 0.02 to 0.05. Punching above the weight is highly discouraged at this stage. Smaller lot size is encouraged at the beginning, and once you are confident enough you are good to go for bigger lot sizes.
Tools and indicators
Even though Metatrader has got all the necessary charts and indicators in forex trading, yet you need some specific tools for intraday trading.
Direct newsfeed
You don’t need to toggle between tabs for the latest news. It can directly be added to the Metatrader terminal.