10 Steps To Become A Day Trader

With the rise of online trading platforms, the world of financial instruments, stocks and trading has become an exciting and lucrative prospect for many. But, becoming a successful trader may not be a simple task. To break up the entire process into simple parts, here is a list of steps that should be taken for transforming your dream of being a day trader into reality.

Step-Wise Guide To Become A Day-Trader

Step 1: Self-Assessment

Day trading demands skills, competence along with commitment to perform better. The essence of this trading lies in:

• Your risk taking abilities
• Long hours of work with little leave
• Continuous thirst to learn

Make sure that you are up for the time, effort and sacrifices that goes into successful intraday trading.

Step 2: Enough Capital

A golden rule of thumb is to have sufficient capital by your side before your journey as a day trader begins. Losses are a part of the trade game and being prepared for the same always counts.

Step 3: Analyze the Market

Have a solid understanding about how the market moves day trading tips and the various events that affect its movement. Be it minor details such as holidays or exchange day trading hours to the complex ones like margin requirements, news events and more.

Step 4: Know Securities to Trade

Different financial instruments are traded differently. For this you need to have a good understanding about the kind of securities that you are planning to day trade and the specific requirements that they have.

Step 5: Design or Choose Suitable Trading Strategy

You will stand nowhere without a supportive day trading strategy. Pick at least three, test them and then stick to those that offer exceptional benefits.

Step 6: Combine Strategy to the Big Picture

Choosing a strategy is not the only thing that you should do, instead combine them to the real-time trading to come up with a full-proof plan.

Step 7: Know the Importance of Money Management

Make sure that you create, practice and structure the multiple day trades according to a well-thought capital allocation and money management plan.

Step 8: Back Test the Historical Data

When satisfied with the final plan, back test it using a test account. You can also do this with the help of the historical data.

Step 9: Start at a Small Scale and Then Expand

Never place a huge order during the initial phase of trading, take your time to explore the market, recognize its intricacies and then move towards the bigger ones.

Step 10: Brokerage Fees

Choose a broker carefully, as this trading often attracts more fees due to the high volume of transactions performed in a single day.

Make a note of these simple and effective steps to make your impactful mark in the world of intraday trading!