9 Day Trading Tips That Every Freelancer Should Know
Ready to get started with day trading?
Want to make sure you’re profitable doing it?
Day trading can be a unique option for making money. It can be a very good way to play the stock market or even get into the forex market.
While the day trading style isn’t right everyone, for many people it is a perfect choice. Successful day trading can help you boost your income and can be a fun way to get more money coming in.
However, if you’re new to day trading you might not know where to start. Below we’ll give you our top day trading tips so you can be more confident with your trades.
1. Pick Your Platform
The first thing you need to do when getting started with day trading is to choose your trading platform.
There are many platforms you can use when trading but if you’re specifically looking to become a day trader you’ll want to look for a platform that makes that easier for you. Some platforms will come with features that are particularly suited for day traders.
Give a few platforms a try if necessary to make sure you can find one that is easy to use and that you’re comfortable with.
2. Choose the Right Broker
When it comes to choosing a broker, be sure to keep commission costs in mind. High commissions can cut into your profits in a big way and make it harder for you to succeed in trading.
A low fee broker is ideal, but make sure that they still offer the services you need if they’re priced low. Brokers can vary greatly in what they offer. However, chances are if you do some digging you’ll be able to find a broker who is reliable but doesn’t charge outrageous fees either.
3. Practice Patience
Few things require as much discipline and patience as becoming a day trader.
When you start trading you need to choose a strategy that you’ll be using for your trades. However, many beginners make the mistake of choosing a strategy but getting cold feet and abandoning it far too soon. Don’t dump your strategy before you’ve had a chance to tweak it and give it a proper chance.
Also, keep in mind that the best day traders don’t trade every day. They wait until they see opportunities that meet their criteria even if that means not trading at all some days.
4. Put the Hammer Down
Unfortunately, some aspiring day traders end up being too afraid to start. Don’t make this mistake but instead be prepared to pull the trigger and get into the game once you’re ready.
Let the fear of failure pass. Simply start executing trades when the time comes and don’t second-guess yourself too much.
While you may lose money on a trade from time to time, especially when getting started, it’s important that you don’t stay in the planning or learning stage forever.
5. Manage Your Risk
When you’re a day trader, you need to have a plan for managing your risk. Look for ways to control your risk for each day and set a daily loss limit to inform you when it’s time to stop trading for the day. Setting your loss limit at around 3% of your capital is a great rule of thumb to go with.
With each individual trade, you should also work on reducing risk. You may want to pick a number such as 1% of your capital which you’re willing to risk for any trade you make.
While your own personal risk rules may vary, it’s important to have your limits and to stick to them.
6. Set Profit Targets
It’s also important to set profit targets for yourself that you can fall back on when you’re letting emotion cloud your judgment. Setting rules and parameters for yourself can help keep you balanced and logical and prevent your emotions from getting the best of you.
A profit target is a set amount of acceptable profit for trading. Sometimes if you get greedy and wait for too much profit the trade can turn against you. A profit target can prevent this.
Similar to using loss limits, profit targets are also essential to make sure you’re always making the wisest decisions on your trades.
7. Have a Consistent Routine
When you’re a day trader it’s a good idea to have a consistent routine that you follow when it comes time to trade and do your work for the day. As part of this, you’ll probably want to do your trading at the same times every day.
Certain times of the dar are ideal for day trading such as the first couple of hours after the market opens and the last two before they close.
As mentioned above, you should have consistent rules for yourself. However, you should also have a consistent work routine as well.
8. Practice First
While you may be eager to jump headfirst into day trading you may want to hold off a bit and first do some practice day trading. Try some demo trading software to practice your skills before you start using and potentially losing real money.
You can do this type of practice at any time so it’s a good idea to try this some first before you make the switch to doing it with the big bucks. Demos are very flexible and can teach you a lot about trading before you start the real thing.
In addition to focused practice, you should also be educating yourself as much as possible before getting started. You’ll, of course, want to learn about the fundamentals of day trading. You may also want to discover more about advanced strategies such as short selling as well.
9. Learn From Your Experiences
When you’re a day trader it’s also important to pay attention and learn from all of your experiences. While you should set a strategy when starting out but you should also be tweaking it along the way and perfecting it.
Be sure to take time to reflect on not only your wins but your losses as well. If you do, you’ll likely find that you’re learning at a quick pace. You’ll end up avoiding your past mistakes and will gain a lot as a result of your insights.
Making the Most of These Day Trading Tips
While day trading isn’t for everyone, it can potentially be an excellent source of income if done right. Make sure you give yourself the best chance at being a successful day trader by using the day trading tips listed above.
Looking for more financial tips? Check out more blog posts now for more helpful insights.