You’ve always been interested in investing. You have a great portfolio now, you constantly monitor your retirement fund, and you’re the first to know about new investment opportunities.
Lately, you’ve been wondering if you can do more. The idea of day trading appeals to you.
But can you make money day trading?
If you take your time, do your research, and set realistic goals and limits every day, the answer is certainly yes. In some cases, especially as a novice day trader, it may make sense for you to meet with an investment advisor or another expert.
This will help you clearly define your investing goals, as well as your overall risk tolerance.
However, jumping in without taking the time to learn the ropes first will only cause you serious losses.
If you’re in love with the idea of making money day trading, then you need to keep on reading this post. In it, we’re sharing some of our best and most effective no-nonsense tips to keep your portfolio strong and your profits high.
Especially when you’re first learning how to make money day trading, it’s easy to get bogged down by the details and second-guess yourself.
It’s, of course, important to take the time to learn about some of the key terms in the industry, as well as popular day trading strategies. However, overthinking can cost you — and cause you to miss out on awesome opportunities.
In the world of trading, it’s your ability to move quickly and decisively that will help you to make the most money. The best thing to do is to study up and clearly define your investing goals before you begin trading for the day.
This means that, in addition to making a clear choice about your overall stop-loss level, you also need to decide how much profit you need to make before you quit trading for the day.
Remember to stop once you’ve achieved your goal. Making hasty decisions that go against your original plan will only land you in hot water later.
Remember to Diversify
If you’re serious about making money day trading, then the truth is that trading stocks alone often isn’t enough.
Of course, playing the stock market is a great way to get your feet wet and ensure that you feel comfortable with the idea of trading.
After that, however, expand your horizons — and diversify your portfolio in the process.
In addition to the stock market, also take a look at Forex trading and futures. It’s also a smart idea to consider options trading — but only once you’ve built up a considerable risk tolerance.
Think like a Gambler
Any way you slice it, to a certain extent, day trading is a bit like gambling.
Of course, it has much more than just blind luck to it, but the truth is that there’s a lot of crossover between the gambling and day trading worlds.
First of all, only “play” with what you can afford to lose. If you have capital, remember that not all of that needs to be — or should be — used to day trade. You still need to save for your retirement, your children’s college funds, and everyday expenses.
Decide what you can afford to lose when you start trading, and never go above the limit you’ve set for yourself.
Additionally, ensure that you never dedicate too much of your money for the day on one specific trade (yes, even if it seems like a golden opportunity.)
Just like your total budget for day trading, you should also create a budget for what percentage of your overall funds can be used on a singular trade. Remember that if you put everything for the day in one position, you might miss out on one you wish you could have taken advantage of later on.
Know What to Avoid
How do day traders make money? In addition to following the tips we’ve included above, the also make sure that they know the kinds of trades to avoid.
Especially if you’re just getting started, it’s easy to get sucked into things that seem like a great deal — only to be hit hard with losses once the tide changes.
One of the things that you truly need to steer clear of as a beginner day trader?
Yes, we understand that it’s easy to be distracted by the seriously low prices. However, remember that the prices are low for a reason. In the case of penny stocks, it’s usually because they’re incredibly illiquid.
This means that, once you have them, it’s going to be incredibly difficult for you to find someone who is willing to buy them from you.
In other words?
The best thing you can do for yourself is to avoid them.
Making Money Day Trading Is Possible with These Tips
We hope that this post has helped you to understand that, as long as you stay smart and focused, making money day trading can be done.
Follow the tips on this list, and keep on looking for ways to learn by reading industry newspapers and blogs.
There are tons of ways that you can make smart and lucrative money investing – not just with day trading.
We’re eager to help you to see the kinds of profits you’ve always hoped to make, whether that’s with day trading or another investment strategy.
Keep in checking back with our blog to ensure you continue to make smart investment decisions, whether you have limited capital to trade with or are flushed with cash. Make this the year you make serious profits, and leave losses behind you with our help and guidance.