You might have hit a penny stock for a nice return and now you want to try your hand at becoming a day trader. The thing is there is far more that goes into day trading than simply buying and selling stocks. As a matter of fact, it can be far too easy to lose your entire investment in a bad move.
Knowing a few helpful tips for day trading can mean the difference between a successful new venture and one that leads to heavy losses. Take your time to learn about it and you will be glad that you did so, making you feel like an expert day trader.
Set Aside Your Funds
Never, ever should you day trade with the money that is in your bank account. This is the quickest way to put yourself in a compromising position and can set you up for heavier losses than you ever anticipated or prepared for.
When you put capital into your trading account, you can assess how much money per transaction that you are willing to take a loss on. If you have $40,000 in your account and determine that you will risk 1% on each trade, that is a maximum loss of $400 per trade.
Set Aside Your Time
Day trading takes time and effort. To be successful at it, you will have to devote the bulk of your day to it. This is a process that requires time to track the market and look for opportunities; you can’t do this if you don’t spend the time on it.
More than anything, day trading is about moving quickly. If you aren’t devoting time to day trading, you could miss out on opportunities. Invest your time as well as your money if you want to see any success.