Day trading is the act of buying and selling securities or financial instruments within the same day on the basis of short-term fluctuations of prices. You can sell these financial instruments many times within the day if you take advantage of small price moves in the market. Read more about day trading in this link here.
Day trading is different from investing. Investing is the act of buying stocks of an asset that will hopefully build profits over time. Investing is concerned with the business they invest in. Most brokers or individual investors look for companies that can make solid profits and a strong pipeline of products in the long run.
On the other hand, many traders in day trading often use borrowed money in order to take advantages of small price movements. They usually choose highly liquid indexes or stocks. Day traders and investors usually follow the same principle and wisdom when it comes to the stock market. They buy low and they sell high. The difference is that day trading is done within a very short period of time while investing is for the long-term.
If you are new to day trading, here are some of the basic tools that you need in order to start.
Basic Tools of Day Trading
High-Speed Internet Connection
A reliable and fast connection will enable you to open multiple web pages and be on the top of the day trading game. You have to invest in ADSL or cable types of internet connection with at least a mid to high-range internet speed package. If you have slow internet, you will notice a lag when multiple apps are running. The trading platform might not update quickly as it should. You should choose a reliable internet service provider. Day trading is not for someone with a sporadic internet connection that constantly goes down.
Test Several Trading Platforms
Trading platforms are places where investors and traders can open, manage, and close market positions. These are commonly offered by brokers at a discounted rate. In exchange, the trader should maintain a funded account that meets the required trade numbers every month. If you want to explore platforms for day trading, you can get more information on sites such as https://tradingreview.net. You can get knowledge through reviews, books, and videos from these sites which can help you know more about day trading. When you are first starting out, it is essential to download several trading platforms at first. Afterward, you can begin to create your own unique style of trading. Trying out several different software and platforms can help you gain the experience that you need. Ultimately, you will be able to choose the platform that suits you best.
Brokers
Brokers have a very important role when it comes to day trading. They are the ones who facilitate and inform you about the latest trends in the stock market. In exchange, they charge for a small fee or commission on your trades. Many day traders choose brokers who have low fees. This is because the profitability of day trading can be ruined by brokers with high commissions. You need someone whom you can trust and you can lean on in case there are problems in your stakes. Brokers are so worth it especially if your computers crash and you can’t get out of a trade. There are typical brokers who can offer customized fees and structure of commissions that are exclusive for day traders.
Ideal Times for Day Trading
In day trading, consistency is the key to success. For some, trading is a full-time job which requires their full attention from 9:30 am to 4:00 pm Eastern Standard Time. Others just want to trade part-time and would devote at least 3-4 hours of their time trading. If you are a part-timer and you are new to trading, you can focus on the first hours after the opening of the stock market. For the US market, the time typically starts at 9:30 am EST. You might want to trade until 11:30 am EST since this can be the time where big moves of prices and profits are being made. You can also trade at closing times especially from 3:00 pm to 4:00 pm EST.
New to Day Trading?
Minimize your risk by reading investing books, day-trading tips, and attending seminars. You can also read reviews online, contribute and read on forums, and a lot more. The good news is that there are already people who have seen and done some of the day trading tricks which can also make you successful. You can get help from them anytime.
