Friday, 12 April 2019

How to Earn Profits in Day Trading

You have signed up on GigaFX, you are conducting trades and yet you are still unable to earn the profits you hoped. What is the problem? Yes, it is true that day trading is profitable, but it is also important to know that you have to put in a ton of hard work before you can enjoy any returns. The problem is that most traders simply jump in and expect to start making profits right away. This is not possible as there are many traders who have been around for a while and have not yet reached their desired success levels.

The question is what exactly should you do? Here are some things that can help you in earning profits through day trading as quickly as possible:

Master the basics 

First and foremost, you should know that it you will never be able to earn the high profits you have dreamt about if you don’t understand the basics of day trading. You have to be aware of the basic rules and regulations, the factors affecting each market, the jargon that’s involved as well as the other factors that may have an impact on your trading. There are plenty of books and videos that you can find online for learning the basics of day trading so you are prepared to enter the market and know what to expect.

Understand money management 

Obviously, you need an online broker and they offer you multiple account types with different deposit requirements. You may be tempted to your entire capital in one go because the more you invest, the greater your returns, right? While this is certainly true, it also means that you can lose everything in one go. If you make a wrong trade, all your investment will be wiped out and you will be left with nothing. Therefore, it is better to start small and only invest a small sum in every trade. Moreover, you should also ensure that you are investing the money you can afford to lose or else you will be in trouble.

Never trade without stop loss 

One of the easiest ways of controlling your losses is to take advantage of stop loss. This order type is designed to stop your losses once they reach a certain limit. Every trader has a different risk tolerance and so the amount of loss they find acceptable can also vary. You can decide how much you can afford to lose and set a stop loss accordingly. Once the stop loss is reached, you will be alerted so you can close the trade and walk away from it.

Keep your emotions in control 

Never let emotions interfere in your trading. Perhaps, one of the most notable reasons why majority of the day traders fail is because they let their emotions color the decisions they make during trading. It is essential to stay objective and make decisions based on facts and hard evidence rather than just going with your feelings. For instance, if you are losing, it is a given that you will panic and in doing so, you might decide to close the trade at a loss. But, what if the trade turns around a little while later? Then, you will end up regretting your decision. Likewise, if you do what other traders are doing and it turns out to be a mistake, you will again suffer losses. Thus, you need to eliminate your emotions when you are trading and only consider facts and numbers.

Keep up with the trends 

You need to keep your emotions in control and you need to keep up with the trends. It is vital for every trader to know what direction the market is moving in and what the latest market trends are. Knowing the trends can help you in making your future decisions and coming up with a trading plan. When you know what to expect, you can make smart decisions that can help in minimizing your losses and maximizing your profits.

Choose the right broker

A prominent reason that stands in the way of success of most day traders is that they don’t select the right broker. In their desire to save on trading and commission fee, they opt for unreliable brokers who are unable to provide them with the platform and services they need. This can end up costing more in the long run because you miss out on trading opportunities and have to switch brokers. You can read GigaFX review and that of other brokers to find out what they offer and then make your decision accordingly.

Find a mentor 

When you are a new trader, there is only so much you can learn from books, videos and tutorials. The actual market is different and the only way you can get an insight into it is by talking to someone who has had some experience with it. How can this be done? You need to find a mentor who has worked in the market and have the skills and background to give you sound advice. They can offer you support when you are down and give you tips and tricks to navigate the market.

Don’t be stubborn 

There are times when a trader suffers from a loss that they become stubborn and decide to stick with the trade, hoping that it will turn around. This is a good tactic, as mentioned above, and you shouldn’t make a decision too quickly. However, this should only be used if there is any indication that the trade will reverse. Sticking to a trade out of stubbornness and adding to your losses will only wipe away your investment and leave you empty-handed at the end of the day. Therefore, you should not be too stubborn when trading and learn when to step out.

As long as you follow these rules during day trading and put in time and effort, you will be able to earn the profits you want. 

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