Saturday, January 19, 2019

Learn These Rules Before You Start Day Trading

trading in light
There are plenty of people around the world who dream of earning a fortune by day trading on the stock, Forex or Futures market. If you're willing to be patient, spend your time improving your strategy, and focus on learning about day trading, then you could become successful quicker than you might imagine. However, it's important to remember that any trading strategy - no matter how good, can lead to disaster if you rush in without the right mindset.

To get your mindset right for day trading, one of the first things you'll need to do is learn the ground rules. Remember, research suggests that many day traders fail to make consistent money when they don't have the right strategy in place. Here are our ground rules for day trading to keep you moving in the right direction.

The Golden Rule of Day Trading

Perhaps the most important rule you can keep in mind when you're day trading is that you should never use any money that you can't afford to lose. At the end of the day, it's true that many people make great money with their day trading strategies, but you should go in expecting to win. In fact, the aim for most people in day trading is to simply "lose" less often than they win. Focus on using the money you can afford to lose.

If you can't afford to lose anything, then the best thing you can do is start by practicing. Paper trading solutions and virtual trading simulators will help you to put your skills to the test while you're still getting to grips with the ins and outs of day trading. Though you won't make any money on a paper trading simulator, you won't lose anything either.

Start Small and Work Your Way Up

Another important rule to keep in mind when you're day trading is that you should never rush in too fast. It's tempting to get excited in the day trading environment, particularly when your strategy leads to the occasional quick win. However, if you jump into action too quickly, then there's a good chance you'll be left with bigger losses than wins. As you first start to day trade, keep a tight rein on your money, and don't spend anything extra until you know you're confident in your decisions.

Ultimately, a lot of people want to day trade instead of working for a living, and if that's your goal, there's nothing wrong with that. However, you shouldn't quit your day job too quickly. There are plenty of day traders out there that get a great run of luck but end up losing everything because they get too cocky too fast. Remember that it's just as easy to lose quickly as it is to win fast. The key to excellent day trading is remembering to keep a reign on your feelings of fear and greed and starting off as small as possible while you're still learning.

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