Beginners’ tips for day trading
Embracing tips for beginners in day trading
Just like having to start any career, there is a lot that you will need to learn before you start to be a day trading at South African forex brokers. Apart from the need to be able to decide the trade and the amount of capital that you will input, you will require to get proper equipment as well as software, determining when you are to trade and how you are going to manage the risk involved with the trade.
The following are some of the tips to start you up in the correct direction as you start with your journey.
Pick a day trading market
All the markets offer a potential for profit. Thus, it might trickle down to the amount of capital that you require in order to get started. Thus, it is important that you master the markets at once. It will make your attention to be divided and it might even take longer in making money. You have to ensure that you pick a single market and then try to adapt to it and learn the other markets later. There is a need to be patient.
You might be having a market in mind already but the following is a background in summary and it will come down to your preference and at the same time, what you are likely going to afford.
- The forex market where you will be trading the currencies like the EUR/USD needs some capital. You can be able to start with as little as $50 although it is recommended that you start with more.
- To trade with particular markets for futures might require you to have a minimum of $1000 to get on it. There happens to be a wide assortment of the futures trading which are available for you. They are normally based on the indexes or commodities like gold, crude oil, or the movements for S & P 500.
- For the stocks day trading, you will need at least 25000$, which makes it a capital intensive option.
If you are a pattern day trader, you can be able to execute four and above days of trades within the known five days of trading.
Software and equipment for day trading for newbies
You will require a few tools which are basic for the trade. They include the following:
Laptop or computer
When you have two monitors, that is the most preferred option, but not a must. The computer needs to have plenty of memory and a processor that is fast enough which when you start running your program for trading, there will be no crashing or lagging.
You don’t require to have a top end computer, but you will not want to go for a cheap one either. Computers and software keep on changing, and thus, you need to ensure that the computer you take is going to be compatible with the software you will run on it for trading. Having a slow computer might be quite costly when dealing in day trading, especially if it ends up crashing while you are doing your trading or it slows and cause you to be stuck in your trades.
Quick, reliable internet connection
The day trading is not recommended with an internet connection which is sporadic. You need to use an ADSL or cable type of internet connection. Speeds are known to vary across the type of services and thus, a need to aim at having a mid-range package for your internet.
The internet which has slow speed offered by an internet provider could do the job, but if you are opening a variety of web pages as well as running several applications, then you might end up noticing your trading platform will not update very fast as it needs to. In case your internet happens to go down most of the time, check out and find if you can get a more reliable provider.
A platform for trading
You should download various trading platform and ensure that you try them out. Because you are a newbie in day trading at South African forex brokers, you will not be having a trading style that is well developed and thus, a few that you are offered by your broker should be utilized and you see what you would prefer.
You have to always remember that you might end up changing a platform for trading quite often within your trading period or you could try to alter the way it is set up so that you can be able to accommodate your progress in trading. There are several day trading platforms which are popular for forex, futures and stocks trading. Get one which loads fast and it has everything that you require.
For the futures and forex trading, one of the well-known best practices is to use the Ninjatrader replay feature on the NinjaTrader platform that allows you to trade historical days if you want to trade in real time.
They are the ones who will facilitate you trade and exchange charges, your fees on the trades, and your commission. As a day trader, you want to focus on brokers that charge low fee as the high commission will end up costing you much, running your profitability of the strategy of day trading.
But even with that, you have to remember that, the low fee broker might not be the best for you. you should get a broker that will be there to give you support if you happen to get into an issue while trading. Providing some extra as commission might be worth if the company is likely going to save you several thousands of dollars when your computer decides to melt down and you are stuck, unable to do work. Professionals will be in a position to advice you what next move to make.
Though major banks are known to offer trading accounts, but they are not the right option for you as a day trader. They have higher fees and as a newbie, you will do well with a smaller broker offering a customizable fee and a structure of commission to the day traders.