Every game has rules, even day trading. If you are a new player, you must pay attention to the basic rules. These rules are certainly not binding, but they can help you make some key decisions and provide broader guidance.
“Knowledge is power.” The knowledge here includes information about basic trading procedures and tools, information about the stocks you plan to trade (such as company finances, reports, and charts), understanding the latest situation in the stock market, and tracking events that affect stocks Wait. In the absence of knowledge, it may become more difficult and risky.
As a rookie, do your homework. List the stocks on your wish list, keep up to date with selected companies and general markets, browse business newspapers, and regularly visit reliable financial websites. A wise decision is a better decision.
Seek truth from facts
It is important to be realistic about profits. When you are ready to trade, make sure that you do not lose considerable gains because of greed. The market is tricky. Rather than lose heavily in the end, it is better to settle down for a smaller profit. Don’t regret losing the opportunity. If you need to, you can always buy the same stock when it drops. Every small profit trade will help boost your confidence and give you the opportunity to try the strategy again.
Margin trading means that you borrow money from a brokerage company to trade. If used properly, margin helps to amplify the results of the transaction-but it is not profits that amplify losses, if the transaction is not good for you.
As a novice, controlling the amount of indulgence is crucial, and cash transactions on hand can help achieve this goal.First, addicted to day trading no Use margin. The high margin requirements for margin day trading have also become an obstacle to many margin trading.
- Each trader’s intraday trading rules may be different, but controlling emotions and limiting losses are necessary for any strategy.
- Novice traders should use “paper money” or fake transactions to trade accounts before investing in their own capital.
- Traders need a clear strategy before they start trading.
- However, it is equally important to adjust strategies and traders’ understanding of the market over time.
In and out
Knowing the prices you want to enter and exit can help you book profits and avoid unnecessary confusion that can lead to wrong transactions. Don’t listen blindly-you must predetermine some level for each stock you intend to trade. If the market is unfavorable, exit to reduce losses.
As a beginner, it is recommended to pay attention to at most one or two stocks during the day trading hours. With just a few stocks, it is easier to track and find opportunities. If you trade multiple stocks at the same time, you may miss the opportunity to exit in a timely manner.
Many orders placed by investors and traders are executed immediately after the market opens in the morning, which leads to price fluctuations. Experienced players can recognize patterns and choices to make a profit.
But as a novice, it is best to take no action for the first 15 to 20 minutes and just read the market. The intermediate time usually fluctuates slightly, and the movement begins to approach the closing bell again. Although the peak hours provide opportunities, as a novice, it is best to avoid trading at that time.
Intraday trading is risky and the possibility of loss is high. As a rookie, while keeping money for basic living, expenses, etc., set aside excess funds that can be traded and prepared for loss (this may not happen), which will ensure that you will not increase your risk by ignoring your money when trading during the day. Daily demand to improve quotient.
Most importantly, intraday trading requires your time. If your free time is limited, don’t treat it as an option. This process requires traders to track the market and discover opportunities that may arise at any time during trading hours.
Avoid penny stocks
As a beginner in day trading, stay away from low-priced stocks. The liquidity of these stocks is extremely low, and the chance of winning a prize is often very low. Don’t let yourself fall into a transaction that is difficult to exit.
When you place a market order, it will be executed at the best price available at the time of execution. Therefore, there is no “price guarantee” in market orders. At the same time, the limit order does guarantee the price, but does not guarantee the execution. Limit orders can help you trade more precisely, where you can set the buying and selling prices (not unrealistic but executable).
Don’t trust any text messages, emails, advertisements, etc. that claim to have higher profits than normal. Not all of these sources are fake, but authentication is required. As a novice, you must not be deceived by others and let you earn a commission with a bad deal.
Sometimes the stock market will test your nerves. As a day trader, you need to learn to maintain confidence, greed, hope and fear. Decision-making should be governed by logic rather than emotion. This may be difficult for beginners, but only those who learn to control their emotions can succeed. Before entering the real-time field, it may be a good idea to try simulation exercises. (InvestingClue has a stock simulator here.)
Intraday trading requires time, skill and discipline. When you participate in the market and trade with discipline by investing time, skills are developed over a period of time. A good understanding of some good day trading strategies can lay the foundation for this effort.
Self-study is the best way to learn. As the legendary trader Jesse Livermore said, “I know from experience that no one can give me a tip or a series of tips, which is better than my own. Judgment can make more money for me.”