3 Tips To Help Prepare You For Day Trading
So, the trading bug has bitten you and now, you want to dabble in the world of stocks, indices and currencies. Every newbie planning to become a full time trader should know that the industry is a mine field. You are bound to face several tribulations on your journey to become a full time trader. Thanks to improved technology, people have access to trading systems and profitable signals.
Today, new traders may require a small capital contribution in order to begin trading. In other cases, the capital is not required and new traders can have access to signals after signing up to a trading platform. Many people think that to become a full time trader, you need to have an advanced degree, a high pedigree and get to work in an investment firm. This is not the only option. People can comfortably trade even in the confine of their homes.
Here are 3 tips to get yourself ready for day trading.
Have Access To Sufficient Capital
Since you don’t work at an investment bank and you want to become a full time trader, it means you will have to quit your current full time job. Okay you have computers at work and even your own personal laptop with high speed internet connectivity, so why can’t I trade while working at my current job? One thing you need to know is that you don’t have the right equipment. Trading requires high performance computers. Secondly, your productivity will be low because your attention will be split between trading and your current job leading to you being fired.
Even though you have a high performing gaming laptop at hand, it’s best to quit and be ready to face the world of trading. One way of preparing yourself for the tough journey ahead is having access to sufficient capital. Yes, there are platforms that will not request you to invest any capital while others will. Having sufficient capital will ensure your ability to purchase high performance computers, capital to invest and funds to spend on expenses while building your account. You don’t want to the pressure of having to make money while learning how to trade.
Secondly, you can engage in a side job that does not interfere with your trading. Since you are working online, why not look for freelance opportunities. If you have skills in photography, web design, app development, software development, content development, social media marketing, YouTube video creation and internet marketing, you can use your skills and earn a decent income.
Research And Create A Routine
In order to become a successful trader, you need to have a solid foundation of knowledge on trading and how the market functions. Educating yourself by researching gives you access and understanding of securities to trade for example stocks, futures, options, ETFs and mutual funds. Without a clear understanding of security characteristics and trading requirements, you will find it difficult to proceed leading to failure. This is not what you want especially after quitting your fulltime job.
Having full knowledge about trading for example margin requirements for futures, options and commodities will eliminate chances of losses. It is also important to come up with a sound strategy. New traders should come up with two strategies. Each will become a back up for the other in case of failure or lack of trading opportunities. As experience builds, you can incorporate more complex strategies setting you firmly on the road to success in the trading world. What you need to keep in mind is that the trading world is dynamic. Your strategies may make money for you for long periods or fail to do so. In case of failure, you need to adapt to changes.
Find A Mentor To Coach You
While research will provide you with a wealth of information that will educate you more about the world of trading, finding a mentor will ensure you are able to pass over upcoming hurdles. Your mentor needs to be experienced, knowledgeable and skilled when it comes to trading. Don’t find a family member, friend or former work colleague who made a few trades before quitting. Look for someone who has been in the business for years.
One thing a mentor will teach you is that you don’t have to play big during your first trades on a new strategy. Even if you have sufficient capital, your mentor will instruct you to start with a smaller amount. As time goes by, you will be instructed to increase the stakes after tasting the fruits of success. Mentors help to guide new traders through the tough journey of trading because they know that markets will remain forever but losses will never be re-accumulated.
As a new trader, you will encounter tons of websites advertising how you can make money easily with trading especially after searching on available search engines. It is important to beware of trading platforms that promise heaven only to deliver hell. In trading, there are no endless and fast profits. Time and effort have to be invested in different strategies in order to attain success. Before you give up your full time well paying job, plan and save sufficient capital, research, create a routine and find a mentor to guide you.