Day trading can be considered one of the most challenging trading systems in the investment world. People who day trades the market usually become confused with their actions and they forget the basic rules of risk management. On the contrary, experienced day traders stick to the core rules of trading and make some serious profit in the retail trading industry. If you wish to become a professional day trader, we strongly recommend that you follow the tips mentioned in this article.
As you read this article, things might seem very easy at the initial stage. But never rely on your gut feelings. Test things in the demo account check your overall trading condition. So, without any delay let’s get into the details.
Selection of the trading instrument
The novice traders don’t know the proper way to select the trading instrument. They are taking random trades and expect to make a big profit from the market. On the contrary, professional day traders take logical steps and manage to make significant progress in their life. They know very well that without choosing the right trading instrument, they will never find the best trading signals in the market. It might seem a tough task but once you learn to deal with the critical factors of the market, the selection of the trading instrument is going to be an easy task.
Selecting the time frame
Being a day trader, you should be selecting your time frame very carefully. A wrong step can cause a big loss and you won’t be able to recover the losses very easily. To make things easier, you should develop a robust trading routine. Learn about the importance of different trading sessions and pick your preferred time frame. Try to avoid the minute time frame as it gives too many false signals. Read more about the importance of a higher time frame strategy at Saxo and curate your day trading strategy based on that. Once you do that, you should be able to make significant progress in your life.
Choose your broker
Smart day traders never trade the market with low-end brokers. They know very well that the low-end brokers are never going to provide the best possible tools for the trade execution process. You might be wondering that the high-end broker will charge heavy fees for your trading environment. But if you do some research on Saxo, you will realize that the professional broker never charges higher fees. In fact, the cost of trading is relatively compared to the low-end broker. However, you have to be mentally prepared to invest a decent amount of money from the start.
Practice in the demo account
To develop your basic knowledge of the day trading profession, you should practice a lot. The professional options traders use the paper trading account to curate a robust trading method. It might take a while to develop a professional trading method but once you learn to take the trades in a professional manner in the demo account, you may move to the real trading account. But make sure you are not using the demo trading account just to create a high-risk trading strategy. The risk factor should be always considered during the trade execution process.
Trading with low risk
Smart traders love to trade the market with low risk. Though they day trades the market, they know the results of each trade are completely random. To protect your trading capital, you should be following a conservative method and create a simple plan to develop your trading technique. Once you become good at creating the perfect trading strategy to minimize the risk, you need to incorporate it with your trading system. But remember, even after using a robust risk management plan, you are bound to lose money. So, do not try to avoid losing trades in the options trading profession.