The stock market is the playground for investors and companies. However, day traders shine amongst big players by reacting according to the market and making a profit on every transaction. One may argue that stock trading is nothing but a big old gambling paradise for the sophisticated crowd.
But, the times have changed significantly, and as we enter into the technological heaven, the possibilities and opportunities in the stock market are seamless. With the advent of highly efficient online platforms, people can do their research easily and minimize the risk factor at every turn.
Day trading is no more a game of luck now; it is a skilled profession that requires due diligence, grit, and patience. A couple of decades ago, people who lived far from the financial capital couldn’t avail of stock market opportunities. However, things have changed today, and you can buy and sell stocks in a matter of seconds with just a click.
Therefore, people have made day trading their primary profession, and they haven’t been disappointed. Although, one must be mindful that the stock market has its caveats that can’t be overlooked. You must closely observe the external factors that dictate the market movement and act accordingly. If you are new to the day trading scenario, here is an article for you entailing six secrets to help you succeed.
Don’t forget the economic calendar
An economic calendar is a very handy tool that will help you keep track of the occurrences of financial events around the world. It is crucial to perform research in an articulated way and move in an organized manner. Several stock trading apps come with this feature, but traders often skip this one. It is a very efficient tool, and by tracking several crucial events, you can prepare a timeline and predict the market’s future movement pattern. It will help you in short buys and sells as well as long-term investments.
Additionally, the calendar app also helps record important indexes such as consumer price index, managers’ purchasing index, etc. The calendar tool has other handy features that will allow you to put filters in your preferences and invoke alerts during fluctuations. Lastly, this tool is free on various trading websites, so don’t forget to make the most of it.
Focus on knowledge
Knowledge is the ultimate tool that will get you through the reveries of the market. And not just any knowledge but the one that will directly affect the market and the trading decisions. Multiple national and international players govern the stock market, and you must be aware of all the updates regarding them. The breaking news is easier to access because almost all the news sites will announce it on your notification panel as soon as possible.
But, surface news will only give you a faint idea about the future of the market. For a detailed analysis, you will need expert comments and inside information about the industry. This will help you minimize your risk even further. However, detailed news analysis is premium content, and it will require you to pay some money to access it.
Although this may sound expensive, subscribing to detailed economic and financial news isn’t a bad investment, and it will go a long way in keeping you updated. Therefore, research and compare different news websites and applications and find the one compatible with your language and interface requirements.
Tools for enhanced analysis
Day trading is not about testing your luck or waiting for the right time to buy or sell. It’s about detailed analysis and calculated predictions. However, predictions and extensive analysis need sufficient reliable data to allow you to crunch numbers per your needs. Several stock trading apps offer real-time charts and allow you to draw lines and derive custom formulae according to the situation. You can make the trendline, resistance support, and other derivatives on the chart to make an accurate prediction. However, such features are often paid, and you might have to spend some money to access these. Although, if you have decided to be a full-time day trader, these tools are a must.
Practice is important
Even the athletes who are at the top of their game cannot get away without regular practice, and the same goes for seasoned traders. Practice allows you to see faults in your analysis and trading game and improve upon them. More importantly, your initial capital, which is hard-earned money, is at stake, and you cannot afford to be casual about it. Therefore, once you conduct your research and make a strategy, apply it to the demo account. Several stock trading apps are loaded with this feature, wherein they provide you with simulator charts and fake virtual money. You can use this feature to practice your strategy in real-time and remove any shortcomings.
Analyze your transactions
A day trader performs hundreds of transactions every hour, and not every transaction is fruitful. Sometimes, traders unknowingly make the same mistake over and over again and end up consuming their stop-loss point. Such traders blame the market for the loss and fail to realize their perils. This happens when you fail to read a red flag or a declining market trend.
Therefore, you must maintain a trading diary to note all the buys and sells and figure out where you went wrong. You can take note of important pointers such as opening and closing points, high candle points, entry/exit points, etc. so that you can go back to the chart later and realize the mistake. A good trader is ready to accept his mistake and rectify it at the earliest opportunity.
Emotional discipline is vital
Holding your nerves in crunch situations is the best thing to do for a trader. You have to leave your emotions outside of the trade and work like a robot devoid of any feelings. Give up the feelings of fear, anxiety, greed, etc., and stick to your strategy no matter what happens. When the market is going strong, sell your stocks at the predetermined point. Similarly, when the market is sliding, don’t lose patience and look to minimize your loss. Instead, back your plan and stay calm under all situations to ensure efficient trading.