How to Trade in Breakout Trading?

How To Start Day Trading For Beginners 2022


Day trading refers to an act of purchasing and selling the financial tools or assets within the trading day. The frequency of buying and selling can change depending on the trader; he can either choose to buy or sell once a day or multiple times over a day. If executed correctly, grasping the benefit of small price fluctuation can be a fruitful game.  But remember it can be dangerous for beginners or the one who does not have any well-thought strategy. 

Steps to start day trading 

To become successful in day trading, one requires a few instruments such as good internet connection, advanced trading platform and a trusted broker. 

Not all brokers are suitable for the large volume of trades executed by day investors. However, some brokers have designed their platforms by keeping all types of traders in their mind (including day traders). One such broker is HFTrading. 

HFTrading is an authentic broker that regulates under the Australian Securities and Investments Commission and the Financial Markets Authority guidelines. In addition, it provides advanced platforms such as Meta Trader 4 for trading. 

Here are some elementary steps on how to start day trading 

Decide the trade or market you wish to invest in

Most traders think that day trading means trading only stocks, but it is wrong. It includes many other possibilities such as trading options, forex, currencies, futures, etc. The beginners in day trading should always choose one market and try to master the selected market before switching to another one. The trader can invest in any of the following: 

  • Trade futures
  • Trade mutual funds 
  • Trade ETFs
  • Trade forex
  • Trade stocks
  • Trade bonds
  • Trade options
  • Trade derivatives 

Select the best and trustworthy broker for you

Once you have decided the type of market and asset you wish to trade, the next obvious step is selecting the right brokerage firm for you to enter the financial market. There are sundry online brokers around the world. It includes both fake and authentic firms. These firms try to attract you by offering various features, but be careful while selecting the best for you. An artificial firm can whip away your account, leaving you nil balance. Here are some points which you could consider while selecting a broker for you: 

  • Regulation: Check whether the firm is safe or not. For this, you could check the licence number and regulatory authority under which the firm is registered. 
  • Research: Research tool helps a lot during day trading. Fundamental and technical research is considered as the backbone of traders. Thus, a day trader must look for the research instruments provided by the brokerage firm. 
  • Speed: One should check the execution speed of the order provided by the broker because for the high-frequency investor, the real-time execution speed is an essential factor. 
  • Consider trading charges and margin: Check the commission or fee charged by the broker along with the maximum leverage offered on trade. Both these things are essential since they can easily eat up the investor profit if set higher.  

Decide when you will start day trading

Decide a fixed trading time for each day. Many investors believe that closing and opening time is the best for making out the most money. Therefore, one can choose to trade an hour after the stock market opening between 9:30 and 10:30 EST or select the last one hour before closing between 3 and 4 pm EST. 

Choose Stocks for trading.

Choosing the stocks, you wish to trade can be confusing as thousands of options are available in the financial market. However, for convenience, you can select one or two shares or stocks you are interested in and focus on trading them all the time.
If you are still confused in making selection, you can go for the stocks which are performing well in the regular market. However, to determine whether the stock is worth investing in and will perform well on the next trading day, you need to stay updated with the financial news and specific price alerts.
However, the strategy of one or two stocks discussed above is best for starting, and you can follow it until you become an experienced day trader. 

Keep aside a fixed amount to invest

The last step in the guide on day trading for beginners is deciding prior how much amount you can risk on the particular trade. Generally, the analyst recommends that you should never risk more than one to two per cent of your account on per asset. It is also advised for the newcomers to abstain from trading on leverages or margin until you are aware and comfortable with day trading leverages. It is because no broker allows you to trade on margin for free and most of them even charge high rates of interest for borrowing their capital. 

Bottom Line 

The guide on how to start day trading has covered all the essential steps to start day trading. One can confidently begin day trading now. The next chapter in the series of Day trading foundation course 2021: An introduction to day trading strategy for beginners deals with top day trading strategies for beginners. If you wish to read other educational courses including a complete guide on forex, cryptocurrency:

About Matthias Kuerpick

An experienced financial journalist, copywriter, and SEO professional. I've written for a number of leading international publications. Although my primary area of expertise is the world of finance, technology, and ethical business, I've also written on topics as diverse as motoring, sport, technology, gardening, and other lifestyle topics. As a copywriter, I've worked with companies such as Euromoney, KPMG, World Wildlife Fund, ING, and CareUK offering everything from ghostwriting, web content, press releases, blogs, and reports. I can also provide excellent social media, PR support, and SEO services.

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