Below we’ve collected some of the best and most tried day trading strategies for beginners. They can be applied by anyone who has just gotten started and is dreaming of becoming a professional trader and the benefits of financial freedom. That being said, the following tips can be of great use for anyone that trades regardless of experience and past knowledge.
So without further ado, here is a curated list of 6 day trading strategies recommended to us by some of the best traders out there.
1. Don’t Quit Your Day Job (yet…)
This might not be a strategy per se, but it is equally as important and something you should get down before you start trading.
We understand it can be tempting to quit your job in order to pursue trading, but the reality of it is that you need to wait. Making money as a day trader is not easy, and it will require a lot of dedication and maybe years of strenuous work.
That is why we recommend everyone to keep their jobs while learning and mastering the art of trading on the side. That way, when you’re finally ready to start trading full-time, it will be less stressful and more rewarding.
2. Knowledge, Knowledge, Knowledge
As with most things in life, having enough knowledge about what trading is and how it’s best done will be your best strategy. Even before you start trading, we suggest you start studying. Learn the basics and then build on that, and if you need to get some experience you can open a free demo account with most of the world’s top brokers.
Just don’t forget that knowledge and your learning curve is an ongoing project that never ends. Many times, what separates the best traders in the world from the rest is their urge to continuously get better and improve their skills.
3. Set a Budget And Stick With It
Setting and sticking to a budget is an incredibly important thing for beginners. In fact, even the top day traders out there are extremely strict with their budgets.
You see, there is always a risk of losing money, and that means you can’t risk money that you cannot afford to lose. By setting a budget, you will ensure that you only use funds that aren’t meant for something else. Also, limiting the amount you can spend will help you become more cautious.
We would argue and say that learning how to make and follow a budget is the most important lesson that every trader needs to learn.
Also, never ever chase losses. In trading, you win some and you lose some, but as soon as you try to “save yourself” from a substantial loss, then you’ve lost all control.
4. Use The Tools Provided
Obviously, you need to get comfortable with all the tools and features that your broker is offering you. Today, most online brokers provide a multitude of state of the art tools that can help you become a better trader whether that is a great trading platform, a demo account, stop-losses or world-famous charts doesn’t really matter. Learning how to use them for your own benefit does.
Most well respected brokers offer trading platforms in South Africa so you can pick and choose from the best.
That being said, you also have to figure out which tools are excessive and which ones make it harder for you to trade, and then avoid using them.
5. Start Small
This strategy goes hand in hand with the budget and not quitting your day job, but it deserves to be repeated again.
Don’t jump headfirst into the world of trading, thinking you will be the next Wolf of Wall Street. Instead, you need to accept the process and enjoy the ride because becoming a successful day trader is no easy feat.
That also means you have to be realistic with your goals and dreams and you have to start small.
6. Stay Calm
Lastly, learning how to control your emotions and remain calm, even in the most stressful situations, will be essential. If you can’t keep your head cool under pressure, then trading is probably not for you.
With that said, traders tend to get less stressed the better and more experienced they become, and it’s definitely something you can learn. So don’t feel defeated if you’re feeling extra stressed and worked up when you first get started.