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Day Trading Tips For Beginners
Like any career, there’s a lot to learn when you’re a beginner at day trading. You will need to decide what to trade, how much capital you’ll need, do a comparison between the best prop trading firms, but you’ll have to get the proper equipment and software, decide when to trade, and how to manage your risk. Here are some tips to get you started.
Picking A Day Trading Market
All markets offer profit potential, so it often comes down to how much capital you need to get started. Don’t try to master all markets at once. This will divide your attention, making it take longer to make money. Pick one market you so you can focus your research. Once you learn how to make money in one market, you can adapt to other markets.
You might already have a market in mind. Your choice should come down to what you like and what you can afford.
- The foreign exchange market, where you trade currencies such as the euro and US dollar, needs the least capital. You can get started with tiny amounts.
- Trading certain futures markets could require only $1000 to get started. There is also a wide assortment of futures available to trade. These futures are often based on commodities like oil or gold.
- Day trading stocks requires at least $25,000, making this a more capital-intensive option.
A pattern day trader, like Linda Pawlik, executes four or more day trades within five business days.
Equipment and Software For Day Trading Beginners
Computer or Laptop
It’s preferable to have two monitors, but not required. The computer needs enough memory and a fast enough processor that you don’t get lagging or crashes when you run your trading program. Your computer doesn’t need to be top-of-the-line, but it shouldn’t be too cheap. Software and computers are always changing, so make sure your computer is keeping up. A slow computer could cost you when day trading if it crashes while you’re in trades or it’s slowness, causes you to get stuck in trades.
Reliable Quick Internet Connection
Day trading isn’t recommended with a sporadic internet connection. It would help if you used at least a cable or ADSL-type internet connection. Speeds will vary across these types of services, so aim for at least a mid-range internet package.
E slowest speed offered by your internet provider might do the job, but if you have a lot of web pages open and applications running, then you might notice your trading platform isn’t updating as quickly as it needs to. If your internet cuts out a lot, look for a more reliable provider.
A Trading Platform
Download a few trading platforms and test them out. As a beginner, you won’t have a well-developed trading style yet, so try a few that your broker offers and see which you like best. Keep in mind that you might change your trading platform more than once or change how it is set up to accommodate your trading progress. Try a few and see which works best for you.