Many people get into day trading every single year. The prospects and potentials of the market never change but the dynamics often change. If you are entering the trade in 2018, for instance, the market dynamics will be much different from those of 2016. For this reason, it is important to get familiar with what is happening in the market. By getting acquainted with the market dynamics, you can be able to have a smooth entry into the lucrative trade. Here is a quick beginners guide on how to start day trading in 2018. We will start with a quick overview of what day trading is.
What is day trading?
In the world of trading, you will find many different types of trading styles. Day trading is the kind of style that focuses on many trades on a daily basis. Day traders make and close many trades in any given day. Traders use various strategies to ensure that their trades are profitable by the end of each trading day or session. The day trading market is also characterized by brokers who are the link between traders and the securities being traded. Some of the items that are traded include; currencies, stocks, securities, cryptocurrencies, and binary options.
How to get started
After familiarizing yourself with what the market is about, the next step is to get into the trade. The various trading markets are characterized by different dynamics but the processes are almost the same. As a day trader, you will need to have a trading account in order to trade. It is often recommended to open a demo account so that you can learn to trade without losing any real money. It is also important to have some educational material that will guide you through the trade. In general, the following tools are the most important:
- Analytical tools
- Trading and financial programs or applications
- A trading account
- A little investment to start trading
Day trading strategies
There are a number of strategies that traders use to make profits. Choosing the right strategy is undoubtedly the best thing you can do as a trader. Without a proper technique that guides your trading activity, your chances of success will be limited. The trading market is known as one of the most unpredictable and only those who have mastered the art of trading can win in this market. sometimes, the strategies you choose might also be influenced by your location. The day trading UK market might, for instance, have slight differences with the US market. Some of the strategies used across the market for trading include:
- Trading zones
- Trading on volume
- Arbitrage trading
- Scalping
Analysis and patterns in day trading
An essential aspect of day trading is watching out for the different patterns that manifest themselves on the trading charts. Such patterns are crucial for making predictions on where the market will be headed. Ultimately, traders who are able to correctly predict where the market is headed are big winners in the trade. There are many different kinds of charts and analytical methods used in day trading. The analysis carried out in day trading mainly focuses on tracking the price movements and other issues in the market like volatility. Many different techniques of analysis can be used. The most common tools are nevertheless based on technical analysis. Some of the strategies you will use thus might incorporate:
- Moving Averages
- Bollinger Bands
- Moving Average Convergence Divergence (MACD)
- Relative Strength Index (RSI)
Day trading professionally in 2018
Most traders want to know whether they can rely on day trading as the main source of income. The nature of the market allows for full-time traders. When compared with other ways of doing business like traditional investing, day trading comes out on top because it is one of the easiest markets to enter. There are many risks involved though, and traders need to be equipped with risk management skills.
Risk management
Finally, it is important to know how to manage risks when getting into day trading. In 2018, there are many tools available to manage the risks. Mobile applications in the various stores are great when you want to keep track of your trades. Reading a couple of blogs and books would also help you stay informed on the possible risks. In general, the most important aspect of risk management is knowing when to trade and when to stop.