Daily Trading: How to Start; Beginners guide

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Daily Trading How to start Beginners guide
Day trading or daily trading is when the traders
buy or sell holdings on the same trading day.
Day traders day trade stocks. When it is said
that they day trade stocks, it means that the
traders are either selling or buying their stocks
before the trading day ends. Day trading is also
known as intraday trading. Intraday is conducted
by the traders who are trading every day. These
traders are different from active traders. The
active traders are the ones who trade not more
than 10 times a month. There are some basic
differences between intraday trading and trading
itself. While trading may indicate that the
person involved is holding a share for a long
time, looking for profits in the long term,
intraday would mean that the involved person is
selling his or her holdings the same day
depending on the goals that they have in mind.
Traders looking for profits in the long term are
more inclined towards the facts like how good
the stock is, how much it has grown in the past
and some more things. Day traders, on the other
hand, look at events that may result in price
fluctuations and make their trades accordingly.
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• There are different factors that affect the
  profit potential of a day trader and a trader, in
  general. Let us look at some of these factors.
• Risk
• The traders that are involved in daily trading
  are more prone to risks and hence, they have to
  look at different risk management tools. The most
  important being, being aware of the events that
  make the prices bounce. Apart from that, the day
  traders have to be acquainted with the things
  like Stop loss or take profits too. The day
  traders need to have an upper hand in
  technicalities of trading like reading charts and
  making out patterns within them.
• Capital
• The capital requirements for daily trading are
  different from investment or even active
  trading. The idea gets more diversified when the
  instrument of choice is clear. For example, if
  the trader wants to trade in the foreign exchange
  market, then the capital requirements can be a
  little higher. In the same situation if the
  trader wants to trade in forex, but has the
  option to trade it via CFDs or Futures, then the
  capital requirement falls down. The same is the
  case with any other asset.
• Traditional trading takes a lot of capital out
  from the traders account because of the fact
  that greater the risk, greater the reward
• When the traders look at trading, they might look
  at the things with a different POV that has a
  different trajectory. Trading is not always
  looked upon as booking profits on the same
  trading day but making the money work for itself.
• A brief guide for daily trading
• Trade Demo
• Daily trading is something that needs
  concentration, attention and knowledge.
  Concentration in terms of looking at the daily
  charts, attention in terms of what is happening
  and knowledge in terms of what should be done in
  the case of a certain event.
• Daily trading for beginners should be done with a
  demo account. Everything in a demo account is
  real, except the money. The traders can use the
  demo account to trade over everything that there
  is. One thing that has to be kept in mind, is
  that the traders need to keep a check on the
  money they are investing via the demo account. It
  does not matter if they are trading demos,
  investing big amounts of money can lead to a
  habit of investing heavily.
• While trading demo wont have any effect on the
  trade, the habit that is developed can be
  catastrophic in the case of the real market.
• Be Realistic

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• Having realistic expectations in the market will
  bore better results than having unrealistic
  expectations that can destroy the person. Traders
  need to be real enough when it comes to
  predicting the profit or even the loss.
• There can be times when the profit potential is
  high and it can overshadow the loss potential of
  the same stock. The traders need to be careful
  enough when they look at money-making. Money
  while trading is a slow process, but is faster
  than other traditional methods. But, just like
  every process. It takes time to build. People who
  think that trading is all about making fast
  money, get in a loop and never make out of it.
• Have the right knowledge
• The correct knowledge of daily trading is not
  when to buy when to sell etc but, it is
  something that combines these two questions with
  some more. It is crucial that the traders
  understand what they have to learn and what they
  have to not look at. The right knowledge is
  about the things that run the market.
• Also, it is not necessary that the trader tries
  to become an expert on the whole market. That
  would make him or her filled with information
  that might be of no use at all.
• Pick a market, or pick a sector and become an
  expert in that specific area. Not
• everywhere. Learning about everything will land
  you in places where you dont want to be.
• Understand the market
• To understand the market is to figure out what is
  going up and what is going down and the reason
  behind the fluctuation. Understanding this is
  important, also because the same reason might
  result in the fluctuation of a different stock.
  Learn how the market moves and understand the
  directions well.
• This information will help you in building a
  better trader out of yourself. The market is
  unpredictable and if you are playing with
  something that is fancy, there are more than
  probable chances that will take you towards loss
  than profit. Make sure that the knowledge you
  earn is sector-specific and the market that you
  are trying to tame is also something that you
  understand.
• Begin smaller than you can.
• Entering the market obviously needs capital.
  There is a 5 rule that says never risk more
  than 5 of your total capital in one single
  trade. But it applies to traders who have been
  in the market for a decent amount of time. If you
  are a beginner, cut the 5 rule to 2.
• By abiding by this rule, you will risk less and
  also find it harder to make trades since there
  will be fewer opportunities due to
  self-restrictions.

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• Fewer opportunities will make you go for better
  results. Since you wont be able to trade much,
  you will want to book profits each time you
  trade. Beginning small will also result in
  better management of the capital.
• Diversify
• Diversifying the portfolio is not always meant to
  be good for investors but also day traders.
  Playing around one single stock always gets
  monotonous. So it is better that you look for
  different stocks everyday. This does not mean
  that you begin trading on them right away,
  first, learn about them and then watch them for a
  while. Each stock has a different pattern that
  it follows each day. Learn how the stock is
  moving, why is it moving the way it is and what
  is the event or news that makes it move that way.
• Look for the right stock.
• Each stock or sector that you want to trade on,
  requires three things. Liquidity, volume and
  volatility. The stable stock can be good enough
  for investing but they are never good for
  booking profits on a daily basis. A stock can
  sometimes be less liquid or hold lesser money
  than you expect it to hold. Look for liquid
  stocks or if at all, more liquid assets. Forex
  is one of the most liquid markets in the world
  with more than 6 trillion dollars traded in one
  single day.
• These were some of the tips that you would need
  to day trade. Now, let us look at some of the
  best daily trading strategies.
• 1. Momentum trading
• In momentum trading, the traders can ride the
  wave of the price movement and book their
  profits accordingly. The stock might go up, it
  might go down. The traders, in any case, can
  make money. Momentum trading requires extensive
  research in terms of charts and technical
  analysis. Charts are the best friends of day
  traders. The way a stock is about to move or the
  path it is following, is clearly depicted by
  charts. Charts can be used to understand the
  facts that fundamentals wont tell.
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