5 Day Trading Tips for New Traders

5 Day Trading Tips for New Traders

5 Day Trading Tips for New Traders 1024 546 Steven Dux

Day trading is one career

…that makes people fascinated and nervous at the same time.

People who haven’t tried it yet have heard about the success people have in trading, but also have been warned about the dangers of losing a lot of money. Even though day trading is based on mathematics and human psychology, many people look at stock trading as some mythical concept. I believe that if you know what you’re doing, focus on learning and have the right guidance, you will be able to go about your day trading career in a way that becomes significant for your family’s future.

I’m often asked for my top day trading tips for beginners. Today I’m going to give them to you. This piece is a continuation of my Investing for Beginners series, created for beginners to give them day trading tips and insights on how to get started and make it in this field. If you’ve just come across this article, it’s important you take the time to go through this series and understand the concepts so that you’re better prepared for a successful day trading career.

The day trading tips I’m going to share today are some of the things I want you to keep in mind throughout your career (but especially in the beginning).

Just like any other field, there is

A lot to learn as a beginner

Most day traders fail not because of how “risky” day trading is, but because they do not take the time to learn. They assume that by reading a few articles and meeting a few “experts” they will be able to crack the secrets to success. But that is not true at all. It takes a lot of hard work, patience, and guidance. If you’re feeling inundated by all the day trading tips and tricks out there and are having a hard time deciding who to trust, you’re not alone. Many of the students who come to me feel the same in the beginning.

I did too, when I started. I almost became a part of the crowd that fails in day trading, and I almost gave up. Today, I work towards helping beginners avoid that. Students who work with me are some of the most determined people who are making the right choices and following the right advice, and it’s this that gives them an edge. Anyone who is serious about making it big here does not believe in shortcuts, and that is something I subscribe to personally.

It is absolutely

a journey of learning

The main thing is that you need to know what you’re doing. Most people enter day trading due to the false promises to ‘get rich quick’. I’m here to bust that myth and share actual day trading tips that work, and not some overwhelming advice that does nothing. I wish I had known these tips when I started, but as you probably know by now, the world of trading is populated with people who claim to give the best advice and promise you the world. The guidance out there can be a waste of time as most of it is not very helpful.

I only started to see success when I was no longer just following every expert but instead took my studying into my own hands. I put all my knowledge to the test. That’s what encouraged me to build this series, this blog, and my program. To help you avoid going through 10 different courses that waste your time and lead to nowhere. Even the most skilled investors face losses occasionally, but if you keep in mind some golden day trading tips, you’ll bounce right back. These are tips and tricks that I basically used as a beginner that helped me build a $5+ million portfolio.

1.

The Best Time of the Day to Trade

Contrary to how traditional investing works, day trading involves trading for a short period of time and making quick decisions. After all, the buy and sell happen within the same day. And because of that, the time of day in which a trade is made can be a key factor to think about So are there any particular times of the day which are relatively better and more effective? When you become a seasoned trader, you will be able to figure the best time for YOU. However, as a beginner, you might need some direction on that. I split trading times into three zones.

Between 9:00 a.m. to 11:00 a.m. EST
Between 11:00 a.m. to 2:00 p.m. EST
Between 11:00 a.m. to 2:00 p.m. EST

Typically, I trade between 9:00 a.m. to 11:00 a.m. In these morning hours, the market tends to be the most volatile, increasing the number of good opportunities. This is when the market reacts to all the news and happenings from the previous day or anything that happened overnight.

Exceptions on certain days will be there, but this time slot has proven to be the most effective.

My advice is to perform your trades between 9:00 and 11:00 a.m. Whether you are a part-time trader or full-time trader, this time slot will prove to be beneficial for you. In day trading, less is more. You don’t have to be trading all day long even if you are a full-time trader. A lot of price movement is concentrated during this hour and you can benefit immensely from it.

2.

The Best Market to Trade in

There are a lot of markets to choose from, and it can get confusing when you first begin. The three different markets based on the market capitalization of the companies involved are small-cap, mid-cap, and large-cap. In a large-cap or mid-cap market, stocks move too slowly for a day trader to be able to capitalize on. Ultimately, the goal of a day trader is to make profits due to price fluctuation within the same day. So if the movement of the price is too slow, the number of opportunities is low. Large-cap and mid-cap markets typically consist of companies that are giants like Amazon, Apple, or Microsoft.

The movements in stock prices happen slowly here, about 1-2% a day, which is not ideal for a day trader. Which is why I recommend doing trading in small-cap markets. Small-cap companies are usually those that are relatively newer or lesser-known. The rewards relative to the risk involved are simply higher in small-cap markets. I trade stocks between $3 and $10 most of the time.

The moral of the story: don’t go by how famous a company is; focus on small-cap instead.

3.

Equipment and Software

You must have come across a lot of “experts” who trade using multiple laptops and systems, having numerous screens in front of them. I don’t understand or recommend that. You do not need any special equipment to trade, so if you have been apprehensive to enter trading because you don’t have multiple systems, let go of that apprehension today. All you need is a laptop. I use my gaming laptop for trading and it works perfectly. Now that was about hardware. When it comes to the software you need, there are a few.

Scanning software to help you scan stocks
Your trading platform

Check out this article on my blog to find out more about platforms. I’ve reviewed a bunch of them to make life easier for you. A platform lets you perform most of the major tasks you need to execute during a typical trading day. But first, you need scanning software to help you find stocks.

Scanners help you narrow down which stocks to actually play with. There are many markets and many stocks, so it’s important to have a tool that helps you decide which stocks are potential opportunities. A scanner will help you look for stocks based on your criteria. When it comes to scanners, we are also developing one. It is called Stock Craft and we’re releasing it soon. This scanner will not only tell you about top gainers, but it will also help you find patterns.

4.

Use Historical Statistics

Most traders do not trade based on historical statistics. They play like they are gambling and this is why 94% of them fail. This is where this fourth tip comes in because you need to Trade based on historical data and information; to lead by logic instead of emotion. The smallest amount of slip up in managing your emotions can mess up your profits.

Successful traders know that you must manage your emotions and remain detached from the results of each trade. Leading by emotions is not sustainable in the long run. You need logic that can anchor you to your strategy and that logic comes from historical statistics. My method is very different from most traders. I make use of important historical data to replicate or predict results. Before trading a specific pattern, I track at least one sample. I observe what the frequency is, and what the reward is.

This way, there is no room for speculation. I have control over my emotions and can trade stress-free. Another thing you can do with the help of historical charts is to study other traders’ mistakes and learn from them. These are the benefits of researching historical charts.

I am able to predict exactly how much I'm going to make by the end of that year.

This way, there is no room for speculation. I have control over my emotions and can trade stress-free. Another thing you can do with the help of historical charts is to study other traders’ mistakes and learn from them. These are the benefits of researching historical charts.

5.

Pick The Right Mentor

The moment you searched for how to become a day trader, you must have come across a ton of websites and “experts” promising you the moon. Becoming a day trader is an ongoing process that requires gaining skills, aptitude, perseverance, and patience. There are no shortcuts.

As a beginner, it’s very important to follow high-quality leadership. Steer clear of any mentors that try to lure you into courses by showing you fancy cars and outrageous lifestyles. That does not matter. What matters are the trader’s trades. Go by that. This would be my biggest tip. Find the right teacher…someone who is transparent and teaching for the right reasons. Transparency is of absolute importance here. Anyone can make claims of having made obscene amounts of money and how they can help you too. Don’t go trusting such claims looking at what lifestyle they are projecting. Go by the numbers.

Are they transparent enough to be open about their earnings? Here’s a look at my kinfo page.

Ensure that the mentor you choose is transparent like this!

Don’t fall into the trap of following someone who promises you quick success. There is no such thing. In every industry, you need at least 2 to 3 years to achieve sustainable success. You don’t want to be a one-trade-wonder who disappears from the scene without a trace. While learning from books, podcasts and articles are beneficial, every beginner needs guidance from a mentor. You can read multiple books on the subject and come out having learned only the basics. A mentor will take you beyond the basics.

A mentor guides you through your day trading journey, and in retrospect, I wish I had worked with a mentor earlier.

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