How to Start Day Trading
Day trading is a lucrative business. If it is done right, your daily earnings could be in the thousands. But if you do it wrong, then you could be in the red for a very long time. There’s a high risk when it comes to day trading but there’s also a high reward if you master the skill.
But with such a complex system to master, different mathematical equations to understand, and a plethora of terminology to embed into your brain, it’s hard to know where to begin. Today, we’ll teach you how to start day trading with a few simple steps. Let’s get into it!
Start By Learning How to Trade
Before you can even step foot into the stock market and make your first trade, you need to understand the system. Whenever you’re day trading, you’re essentially buying stocks that are doing well and selling them at a higher price within a period of time.
Think of it as shortened investing. When it comes to investing, you’re going to have stocks sitting in your portfolio for years but when it comes to day trading, your stocks could be out of the door that same day you buy them.
Because of how risky day trading can be, in order to minimize risk, you need to understand both the terminology of the trading world as well as the mechanics of it. Start by reading books that cover these topics.
A few good starters would be “How to Day Trade For a Living” by Andrew Aziz and “Trading in the Zone” by Mark Douglas. While there are many more, these two books cover many of the terms, tips, and starting points that you need to know in order to succeed.
Once you’ve learned the basics, the rest is cake. You won’t experience any unexpected problems and that makes the trading process even better.
Start By Papertrading
One of the biggest mistakes amateurs make when it comes day trading is that they jump in without any experience. This can cost them a lot of money. The best way to minimize risk is by papertrading before you start trading in the real stock market.
Papertrading is essentially creating a mock trading account in which you “trade” stocks. You’ll be mimicking actual trading in a realistic market with fake money. By doing so, you’ll be given experience on how the market moves and what you need to do in certain situations.
Two great platforms that you can get started with are Think or Swim and Trading View. They both provide paper trading and this can help you understand the market before you even get started.
Find a Platform to Start With
Considering that stocks used to be traded in-person, we’ve gone a long way. Now, most trading is done online and in order to get the most return, you want to find a platform that gives you everything you’ll need.
To find a good online trading platform, it needs to fit several criteria:
-Low commission fees
-Affordable account limits
Overall, the best one for cheap trading would be Ally Invest since its low-cost commissions, zero minimum account, and discounts for active members make it an attractive platform for both novices and veterans.
If you’re new to the game, though, E*Trade is definitely the way to go. They provide countless articles and educational videos of your choice that you can use. On top of this, they also have the latest news when it comes to the market along with a 24-hour hotline to help guide you when you’re lost.
So, you want to learn how to start day trading. After all, it’s very rewarding if you can manage to pull it off. But knowing how to start day trading is the tricky part. There’s so much behind a successful career as a day trader.
The best way to start is by following the steps that we recommended you. Learn the terminology, mechanics, and the game of day trading. Then, once you’ve learned the basics, start mock-trading by using a papertrading account such as Think or Swim.
When you think you’re ready for the real deal, use a great trading platform such as E*Trade and get started. From here, it’s no longer about how to start day trading but rather, what you can accomplish.