How to Start Day Trading - Day Trading Guide For Beginners

Who does not know day trading? Yes, stock trading or forex is currently popular among investors and traders. In addition to offering faster profits, the daily trading method can also be said to be not too complicated. This article contains some daily trading guides for beginners that might help you. But we need to know together that day trading or intraday trading has a high risk so we need to be extra careful so as not to lose. In addition, use the best platform for us to do daily trading. Use trading charts and daily trading patterns for our analysis.

What is Day Trading?

Daily trading is buying or selling shares that take advantage of market price fluctuations every day. The way of daily trading is the same as we start a business. A lot of learning and practice is the main key to success. The problem is, we don't just plan a strategy and how much capital you need. When compared to stock investing in general, daily stock trading has the following principles or working methods.

How Day Trading Works

1. Short time

Unlike medium and long-term trading, the way day trading works has a fairly short period. This means that the results can be obtained in a short time, namely daily. For example, we buy a stock in the morning, then in the afternoon we see that the stock is at its highest point, so we can immediately sell it, and automatically we will get a profit on the same day.

2. Using analysis

At the trading level, we really must not be careless in buying shares. We must use analysis before making a purchase, we can analyze trading charts, trading patterns, and so on. In addition, we must conduct market analysis, starting from looking at a list of stocks that have the potential to be profitable, to when is the best time to buy and sell stocks.

3. Use the Buy and Sell Principle

We must use the principle of buy and sell, which means buying a stock when the price is low and selling it when the price is high on the same day. This is different from when we invest in stocks, we cannot sell them on the same day. Because, the new stock profits can be seen after a long period, either monthly or yearly.

Daily Trading Tips and Ways For Beginners

Here are some tips and ways of daily trading for beginners that you might be able to apply.

1. Understand the Different Types of Day Trading

We need to know that several types of daily trading are important for us to know. We should be able to find the most suitable type of day trading according to ourselves, here are the types of trading:

Trend trading
News Trading
Scalping

2. Start and do it with Small Capital

For a novice trader, We recommend starting day trading with small capital first.

3. Must use cold money.

As we said before, trading carries a very high risk. One of the main principles in money management is to trade only with cold money. This means that in this case, cold money is extra money that will not be used for a long time.

4. Set aside funds

In trading, We need to set aside funds. Set aside the number of surplus funds that you can trade and are ready to lose. Remember, it might happen, it might not happen.

5. Set aside time for trading

We have to make the most of our day. Do not consider if the time we have is limited. Remember, day trading takes time, even if it's short. Because this process requires you to monitor the market situation and spot opportunities, which can appear at any time during trading time.

6. Create a daily trading plan

Making a daily trading plan is what we need to do in trading stocks. This trading plan consists of several components, including:

List of stocks for trading.
The entry point or moment to buy shares.
The exit point or moment to sell shares.
The point of the moment is to sell the stock when the price drops.

7. Pay attention to the risk and reward of each trade

The next way of daily trading is to pay attention to Risk and Reward. This is an indicator used to measure the ratio between the potential profit and risk of a trade.

8. Discipline

Last but not least, daily stock trading tips and tricks are to be disciplined in carrying out the trading plan according to the plan. Although it looks trivial, discipline in trading is not an easy thing to do. Because of the nature of every trader who sometimes makes decisions based on emotional influences rather than brain or reason.

That's a guide to getting started and how to day trade for beginners. In addition to the methods mentioned above, we also need to know a lot about trading technical analysis which is widely used in day trading or it can also be called intraday strategy.