If at some point you decide that you want to do something more useful with your assets than just holding it, then you can try day trading. It is a common way for traders to trade in large markets such as Forex or cryptocurrency. We will introduce you to the concept of day trading in this article and try to explain how to start it. So let’s not waste time and get closer to the point.
What is day trading?
Day traders are known for their quick trades, only making them during daylight hours. This process closes all transactions before the end of trading so as to find any available profits on differences in rates between digital assets within a given time period- it’s like finding treasure.
Saying simple, day traders’ aim is to make a profit due to changes in the prices of trading instruments. Using day trading strategies, they carry out various transactions and profit from fluctuation. It may sound unbelievable but if you know what you’re doing it’s possible for one trade to bring huge returns within just a few hours.
How to start day trading?
The decision to day trade is different from long-term investing and, in some cases, it requires a personality trait that’s not all about money. After all, price fluctuations can occur within a minute, and without good mental health and a stable emotional state, each trader can lose their composure.
In order for traders not to lose their minds during the market changes because of quickly reacting with trades, certain strategies are needed to help keep things cool under pressure.
Here are some of them:
News trading – It is a strategy based on news. The principle of it, is as simple and straightforward as can be: you buy assets with positive announcements and sell if there’s negative news coming down from up high.
Scalping – The scalping strategy is one of the simplest and most effective ways to trade. You can take advantage of price changes in your favor by repeating this process over time, making it an excellent way for traders who need quick profits or even just want something more than traditional investing strategies like buying low/sell high.
Daily Pivots – a strategy based on the daily volatility of assets. It consists in buying low and selling high, or vice versa when it’s trading at its lowest point for that day versus what we call “sell.”
Day traders are always on the move, constantly juggling different markets. They use brokers to ensure transactions with personal losses in a secure way that protects them from any risks associated with Day Forex trading during which purchases of currency pairs or sales can be made within one day.
So being a beginner you should be cautious not only when choosing a day trading strategy, but also with the broker you plan on working with.
Day traders who want to reduce their trading costs might consider choosing cftc brokers as an option. The main purpose of the latter is to connect buyers and sellers without acting as an intermediary when concluding transactions. Read more on cftc brokers to get full information on US-regulated brokers.
Day trading Pros and Cons
Like any other activity, day trading has many benefits, but also risky and inconvenient moments.
We’ve highlighted the list of pros and cons to make sure you know what your risk may be before committing yourself as well. Let’s go through it.
Pros
- Day trading is a very flexible form of investing. There are many different strategies that can be used, which makes the research more interesting and diverse than other types of studies might have been otherwise.
- The accuracy of a price movement forecast is more accurate during the day than it would be in a week because trends are easier to guess.
- There is the opportunity to close the transaction at any time.
Cons
- Some Forex strategies are unable to be used because the transactions occur in a short period of time.
- You will lose more than gain the first time.
- Large expenditure of time when trading in short time periods.
- The rapid price fluctuations can be very difficult to track, which leads many traders in emotional instability and anxiety sometimes.
Conclusion
The article introduced how to start day trading and what strategies exist.
Summarizing all the advantages and disadvantages, we came to the conclusion that day trading can be a lucrative and exciting experience. Although the activity is risky, you should definitely try it, because with proper work it can really lead to huge profits in a short time.
Weighing all the pros and cons of it, as well as choosing a competent and reliable broker, you can safely start. When choosing a broker, you should consider not only general criteria like maximum leverage or quality of customer support service but also determine which type of broker will be best for your needs. Check no deposit bonus forex India to get an idea about criteria and some types.
Practice day trading on demo accounts, explore financial markets, and don’t be afraid to take a risk. This will help significantly with success rates.
Author
George Rossi is Chief Market and Broker Analyst at brokertested.com. Prior to being recruited by brokertested.com, he served SVS Securities as Chief Market Analyst for two years. Earlier, he joined Morgan Stanley in Nov 2013 as Research Analyst.
George is a well-rounded financial services professional experienced in fundamental and technical analysis, global macroeconomic research, foreign exchange, and commodity markets, and an independent trader.
(Devdiscourse’s journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)
from Trading Strategies – My Blog https://ift.tt/ud4SoZW
via IFTTT
No comments:
Post a Comment