Interested in making more money and maybe putting something away for later? Maybe you've got your eye on a new house or car but are frustrated with your current income.
Have you considered day trading? It is a great way to boost your earnings. For some, it can even become a way of life. People that dedicate significant time and effort can truly make a lot of money.
However, to get the most out of it, there are a few proven day trading strategies to follow. Read ahead to learn how to get started day trading.
An Introduction to Trading Basics
Does anyone really know how the stock market works? Well, despite how confusing it can look at a glance, this isn't some secret medieval alchemy lab. Anyone can learn about it and get involved.
A company's stock simply refers to the sum of all its shares into which it can be divided. In other words, a share represents a fraction of a company that you can buy or sell.
Determining the Value of Shares
If company X's total worth is $100,000. Typically, newer companies have about 10,000 total shares so, going with that number, each share would be worth $10.
You, an aggressive trader, spend $20,000 dollars on Company X's shares. Congratulations! You now own 2,000 shares and you can sell them, buy more, or just wait and watch.
Company X is a really well-run company and soon increases its total worth by 50% to $150,000. You decide to sell half of your shares but now they are worth $15 each. Now, you get $15,000 for the shares you sold and you still have half of your original shares.
Day Trading Strategies for Beginners
So, you probably aren't going to drop 20 grand on your very first transfer but you get the idea of trading basics. However, it can take time for your stocks to significantly increase in value.
We want to make money faster so we turn to day trading, sometimes called speculating.
This consists of buying and selling shares on the same day. There are minor ups and downs in the values of stocks during the day and there is plenty of opportunities to cash out. Here are seven core points to have success day trading.
1. Have The Right Equipment
You don't need to yell at someone on a telephone anymore. All you need is access to the internet and an online broker. Also, here is our Christmas wishlist for day traders.
2. Get The Right Time Table
The best day trading stocks have the most movement a couple of hours after opening and one hour before closing.
3. Stay Informed
You can't speculate if you're uninformed. Stay ahead by staying informed with world events and company news.
4. Don't Trade With Emotion
Your strategy should be evidence-based. Don't let excitement, fear, or greed get the better of you.
5. Start Small
Don't dump your life savings into your first bid. Day trading for beginners should only involve a few hundred dollars tops. Once you get the hang of it feel free to go deeper.
The popular momentum strategy consists of buying stocks of companies that are trending in the news. Most big news stories tend to give the company a significant boost.
This is a slightly more advanced strategies. It consists of trading against the trend. In other words, you wait for the price to lower and then you go in, expecting it to surge after.
Start Trading Today
Whether you want to save for the future, get rich, or simply have fun with a new and exciting hobby, day trading is for you.
A whole new world of finances and success might be waiting around the corner.
Check out this blog for all the best insider tips and day trading strategies.