How to Become a Day Trader?
Author: Andrey Goilov
Dear Clients and Partners,
Traders can be compared to drivers: some drive fast, while some move around in no hurry. Beginners face some engine malfunctions in the middle of traffic and freak out when having to drive at the countryside. Some enjoy driving at night while for others, such driving is a challenge.
There are as many trading options as driving experiences in the example above. Some trade intraday, some prefer week charts and wait for their trades for months, while stock investors can wait for their profit for years.
This article is devoted to day traders - those who try to squeeze all the juices out of the market over a short time.
Who is a day trader?
A day trader is a one who makes a lot of trades during the day to make maximum profit on short-term market fluctuations. As a rule, positions are held for several seconds to several hours but are always closed before the end of the day not to transfer risks to the night-time or non-working hours of the platform.
How to become a day trader?
Trading intraday needs knowledge, experience, emotional stability, and the ability to make decisions fast. All this can be acquired with time; however, do not rush at the market right after you learnt some tech analysis or got trained in trading psychology. Only all of these aspects taken together make any sense.
If you want to become a day trader, keep in mind the following:
Practical knowledge
You need an excellent understanding of tech analysis and all instruments used for analyzing graphic patterns, trade volume, and trend direction.
Among the most wide-spread indicators used by short-term traders, there are support/resistance levels, the MACD for divergences, the Moving Average, etc.
Some traders would use ready-made trading systems based on a combination of indicators, while others would trade graphic patterns on small timeframes; a separate category trades based on their experience and instinct.
Day trading: advantages and drawbacks
In the stock market, the advantage of short-term trading is the fact that positions are not influenced by the probability of negative night events that can disturb the price noticeably. Such news might be important profit and losses reports, as well as the information about an increase or decrease in the rating of information agencies. Such news normally emerge before the market opens or after it closes.
Trading currency pairs, the day trader is also insured from drastic price movements against them at night time, when news emerge. The trader's dream will be as calm as ever, and they will not rush at checking the terminal and their trades right upon waking up.
Bottom line
Day trading entails increased psychological load that, however, decreases with time. To be always with a profit, a day trader needs to make a lot of trades every day and trail a lot of trading instruments, have deep knowledge of tech analysis and make trading decisions fast.
Day trading is not a path for beginners, but neither it is an unachievable elite group. Follow its principles, practice on demo accounts, train your psychological stability, and you will succeed.
Read more at R Blog - RoboForex
Sincerely,
RoboForex team