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10 Tips for Day Trading Success: Part 1

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10 Tips for Day Trading Success: Part 1

When Day trading, you are buying and selling stocks very quickly. Most stocks will be traded one or more times during a single day. Looking for small changes and taking advantage of these changes can be a very rewarding, but it must be done correctly. Stick with these 10 tips and you’ll be on your way to Day Trading success.

However while there is good opportunity to make money Day Trading, it can also be vey challenging and end in a loss for those who are un educated in the strategies involved. It takes a certain skill set that not everyone is cut out for.

Day Trading Tip #1 Know Your Stuff

As a day trader it is not enough to simply have a general knowledge of trading. To be successful day trading you need to be up to date on stock market news and current events that will cause changes in the stock market. It will be very valuable to you You will be ahead of the game if you are well informed about any changes or foreseen changes in the US economy as well as foreign economies.
Pay attention and spend some time with research if you want to be successful. A good strategy would be to make a list of stocks you may want to trade so that you might be able to pay close attention to changes in these market. Read or Listen to the news. Maybe consider joining twitter.

Day Trading Tip #2: Give Yourself a Cushion

Having a cushion of funds will let you fill confident as you make trades. Knowing what you are willing to risk will help you be more successful. A good range of risk for Day trading is around 1%. Lets use a .5% risk in an example:
Let’s say the trading account has $40,000. If we decide to risk .5% on an individual trade with a $40,000 account, then our maximum loss for this trade would be $200 (0.005 x $40,000).
When trading you have to set aside money and be aware it is a risk. You don’t have to be happy losing money on a trade, but must know it is a possibility. Having money set aside to trade will help you be comfortable and successful.

Day Trading Tip #3: Give it the Time it Deserves

Don’t move forward with Day Trading unless you are willing to devote some serious time. Most of your day will be involved with watching the markets and making trades. It is not something to do during your lunch breaks. To be successful you need to move quickly on trades is a major strategy. Also, as we discussed earlier, market research is so important and can be time consuming in its own right.

Day Trading Tip #4: Baby Steps

If you are just getting started with Day Trading, it is wise to not spread yourself too thin. Try focusing on one or two stock per session until you get the hang of it. This will allow you to really learn and analyze what is going on.

5. Less isn’t Always More

It’s not a bad idea to look for low stock prices and deals, but we don’t suggest using penny stocks. The low risk does not outlay the low chance of making large profits. Penny stocks are often times illiquid as well which is not ideal when day trading.

Stay tuned! 10 Day Trading Tips: Part 2 will out next week. contact us at daytradefeed.com with any questions on tips 1-5.