If you know something that investments you probably have heard of day trading before, this refers to market positions that are profitable at a crucial time, and typically the trader will buy and sell the specific stock the same day. However, you need to know what you are doing and not simply try to buy and sell anything on short-term as the risk can be too great.
Along with great risk comes great rewards, which is why experienced intra-day traders are so popular. But if you are new to this, here are a few intra-day tips for beginners.
- Look for opportunities where supply and demand vary drastically. Use this as your starting point, as the financial market can be unlike anything else you’ve experienced. If there are no buyers, for example, the selling price will go down, if the demand is high, the price will be higher.
- Set your price targets ahead of time. Know how much profit will be acceptable for you and make use of stop losses to help you minimise your risk. Stick by your decisions, even if a trade seems exciting and potentially more profitable.
- Always be patient. Not all successful traders trade every single day. Wait for an opportunity that meets the criteria you are looking for and don’t just trade simply to do something for the day. If you choose your opportunities wisely you’ll maximise your potential profit.
- Be disciplined. Set your targets and stick with it.
If you want to try your hand at day trading, learn from the experts first and most importantly, do not risk anything that you cannot afford to lose. Although you can get great returns with these investments, you can also incur great losses so always plan ahead.