The buying and selling of financial assets with short term price fluctuations are called day trading. This process happens online by speculating the price. Day trading starts and ends in a single day, and mostly it takes place in foreign exchange markets like forex market and the stock market. The people who opt for day trading are usually well educated and have an abundance of money to play in the trading market. There are some methodologies which a day trader needs to follow to become a profitable trader.
Focus on a single market
Beginners may end up using many markets to obtain profit. Sometimes this may not lead to any profits; instead, it makes you a jack of all trades, but master of nothing. Focus on a single market until you become experienced in a single market, and then you can try more markets if you are confident that you can make it happen.
Practice before the real account
When you complete your trading plan, access yourself by analyzing the trading style you possess, and assess the level of trading knowledge you have. The next step is to start trading with your demo account. Sign up for a demo account with a broker who is regulated. Choose the broker according to the assessment you did to yourself. Check before choosing whether the broker can fulfil your needs. Once you choose the right broker and sign up with him, start applying the strategies in the demo account and select a strategy which works for you in the demo account. If the strategy or plan doesn't work in the demo account, then it may not work in the live account.
Set work patterns
Be faithful to your work. Being lethargic and wishing to attain the state of a professional trader is not possible. Set timings for your work, wake up early, start your work at a particular time, check for the economic conditions which may affect the market, and quit trading at a particular time. Follow and maintain the same timings regularly. Finally, check whether each trade has any misalignment with your trading plan. Make it a habit to review your trades and learn from it.
Daily review is vital for the next day's trade. The monthly and weekly review can be useful in many aspects like rewinding the trade tricks or analyzing moves that ended in success or failure. Have a screenshot of the daily chart and review it before the next week's trade.
Stop loss is the rate that the trader fixes to reduce loss. The stop loss helps a trader to be safe during the trade if the price doesn't go in the direction as he/she expected. A trader may think that the price might rise as the indicator shows. However, in some cases, indicators may fail, so it is good to set a stop loss. In any case, with the help of stop-loss, there are options to reduce the loss.
Try to control your risk on each trade. It can decrease the overall loss. You might see only less percentage of loss in a weekly or monthly trade if you are aware of the stop losses you fix daily. Mostly, beginners can try this option and set stop loss to reduce the loss up to 3% or less.
Watch price movements than the indicators
Indicators are most useful during the trade to speculate the price. However, instead of using the indicators note down the direction of the asset. Sometimes the price may differ from the indicators since it is a historical price. So acting practically to the market condition is the best way.
Raise from the mistakes
Mistakes happen in the trade, and it is a part of trading. Without mistakes and loss, you won’t learn anything from trading. When you make a mistake, do not regret, learn from it, and don't dwell on it. Dwelling on mistakes paves the way for a single mistake to lead to more mistakes. Instead, focus on your trading strategy and work on it to attain success.
Do not be distracted
Trading is a market where you need to be conscious. You should not be distracted from the strategy that you are using. When your motto is achieving profits, you must go along with the strategies to attain progress.
Trust your strategy
Professionals say, when you are a beginner, you may be more into learning and gathering knowledge from many sources, but what works is the strategy! Never forget to work without a proper strategy since it is an essential part of trading. Trust your strategy and work on it to make a profit. Do not over trade at any time and do not swap too many strategies. As a beginner, you need to sit back and watch how the professionals are playing in the market.
The points mentioned above will put you on the right path to become a profitable trader. It can happen only when you follow it regularly. Because the level of victory is in the level of effort you put in. In a word, being responsive and acting according to your will can produce you sustainable returns.