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Can You Be A Day Trader?

by CFD Guru Team   ·   

Can You Be A Day Trader?

by CFD Guru Team   ·   

Intraday Trading

Intraday trading, also known as day trading, means the buying and selling of securities during official trading hours. Some of these securities include Exchange Trade Funds (ETF) and stocks. Intraday trading is a short-term form of trading where day traders look to make multiple trades in a single day by monitoring the timing trades, price movements, and other significant details. At the close of an intraday trading, a successful day trader must have been able to make reasonable profits from the fluctuation of the short term prices of various assets. Most day traders employ strategies that give them an edge in intraday trading. Some of these strategies include range trading, news-based trading, and scalping. 

 

Can You Be A Day Trader?

A day trader is a person that uses day trading strategies to trade securities and make profits on any preferred security traded in the intraday market. A day trader engages in the buying and selling of securities multiple times in one day. The key thing to note is that a day trader does not carry any trading position into the next day. All trades are initiated and concluded on the same day. 

 

Anyone can be a day trader as it does not require any unique college degree. All you need to have is a keen interest in the financial market and capital to start. The advent of the internet and various online trading platforms has made it relatively easy for just about anyone to go into intraday trading. However, it is worthy to note that you must have a reasonable understanding of securities trading, financial market behavior, online trading platforms, and personal disciple before going into intraday trading. You must also understand that just like other forms of trading, intraday trading has its risks.

 

Essential Skills Needed For Intraday Trading

As you well know, it is not advisable to go into any form of trading without requisite knowledge in fundamental economics, technical analysis, and financial markets. This also applies to intraday trading. The fact that you initiate and close trading in a single day does not make intraday trading an easier type of financial market trading. To be a day trader, you should endeavor to also have the following skills:


Research  Skill

You cannot do without research when it comes to day trading. Be it researching on the right online trading platform or security to trade in, you must be able to filter through a lot of market information to day trade successfully. The financial market is a global market, and you must be able to research economic and market information, trading, security, prices, and so many more. Knowledge is the first step of being a successful intraday trader, and you acquire knowledge by research.



Analytical Skill

Analytical skill is as important as research. It is the ability to put into perspective all information gathered during your research. The analytical skill of a trader is used to understand, pinpoint, and use all trading information to leverage trading positions. In trading, there is a lot of mathematics involved, which are represented by charts and patterns. You must be able to analyze these charts and patterns to be a successful day trader.

 

Record-Keeping Skill

You must be able to keep track of your trading patterns to ensure that you don’t make the same mistakes and also improve your trading strategies. Keeping records also allows you to identify successful trading strategies that may work for you on every new trade you make.

 

Consistency 

The key to being a successful day trader is to be consistent, no matter the outcome. It is essential to learn from your mistakes and try again. If you want to learn and grow in day trading, you must have the resolve to keep trying and not give up when you have a bad day in the market.


Patience and Discipline 

It is essential to have these two things in your trading locker if you want to be a successful day trader. A good day trader must be able to identify trends and resolve not to trade on days that there are no potential profit opportunities and wait for days that present profit opportunities. It is important not to trade just for the sake of it.

 

Essential Tips On How To Become A Succesful Day trader

Being a daytrader requires a certain level of emotional balance because of the ups and downs presented by different market situations. Before you start day trading, you must have the mindset that you will lose money. It is not advisable to go into day trading with the mentality of guaranteed profit at the end of each day’s trading. Apart from diligent research and high analytical skills, here are some tips on being more adept in day trading. However, these tips are not foolproof, they are just a foundation for building the requisite skills to be a successful day trader. 


Have A Day Trading Strategy 

Having a trading strategy is essential in day trading because it helps you identify the market dynamics and gives you better risk management. You can test run a trading strategy by checking it against historical market information and using a simulated trading account to test its efficacy. When you find the perfect trading strategy that works for you, be disciplined enough to stick to it and also revise it as the trading market evolves.


Have A Business Mindset 

You should treat your day trading as a business and not a paid job. Trading involves taking risks like you would a growing business. When you trade with a business mindset, it will enable you to cope better with whatever the outcome after a day’s trade.

  

Work On Your Tech Savviness 

You can’t make any headway in day trading without knowing how to handle the requisite technologies involved. You need to be able to operate and analyze various charting software and investment tracking apps used in day trading.


Learn How To Moderate Your Risk Appetite 

It is essential to only risk what you can afford to lose. Having sufficient capital to trade will ensure you trade in a logical manner. Never risk money you can’t afford. 


Know When To Quit 

There will be good and bad days when you trade, but it is important to be disciplined enough to know when to stop, whether you’re having a string of daily profit or losses. 

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