No one should jump right into the bullpen without knowing what they are up against first. There is no such thing as luck. There is no such thing as “a sure thing.” Day traders need to know the ins and outs before they attempt to make a successful trade.
Day traders need to pay attention to the following ten tips if they want to abide by the rules and make more money than they lose.
1) You should start by testing the waters. Create a dummy account. Traders should not move onto a real account until they are sure they know how the game is played. Most online markets allow day traders to create a dummy account. You may feel as though you are missing out, but the practice does help. WigMarkets
2) You should resist the urge to trade in the first half hour. It is going to be tempting. You will see things that you might want to move on. However, the market is very unpredictable in the first 30 minutes. Play it cool. Everything can change in the blink of an eye. ECNpremium.com
3) Some day traders like to trade on the margin. That is a newbie mistake. You should only be using the existing cash you have to trade. The only downside is that you need to wait until the cash settles before moving onto the next trade. However, it will keep you from falling into some bad habits.
4) You need to know your limits. There are legal limits you need to abide by. You can only trade up to 4 times in a 5-day period. Did you know that? Traders who do not abide by this rule do lose money. You will need to deposit at least $25,000 into your account to cover the losses. It is not worth it.
5) You are going to be getting a lot of tips. Pay close attention to who gives you the tips. A lot of your tips come from unverified sources. They want you to take the bait. They want you to lose money. Sometimes it can be challenging to identify a verified source, but you need to do it.
6) You should be keeping a diary of your actions. Not every trader does that. Sometimes the most skilled of day traders forget to keep a diary. You do need to be disciplined. The upside is that you can keep track of your history. You know what works and what does not.
7) Day traders do not win every time. You are going to lose. You need to expect that. That lesson teaches you patience with the market. Sometimes you need to give others a chance to make a buck.
8) The future can be hard to predict. Everything can change in the blink of an eye. However, you should have some kind of plan moving forward. A plan keeps you inside the lines. It teaches you patience and self-control.
9) Markets are going to tempt you. It is in your best interest to pick a market and focus on that. Become an expert in your field of choice. That will help you make better choices down the road. It also helps you to block out the noise.
10) Day traders need to learn how to master different tasks and different resources. It takes a lot of time and energy, but the good things do. You need to become a “jack of all trades and a master of none”, so to speak.