Starting any business is not easy. If you have started at least one in your life, you know that no matter how much you seem prepared for it, when the first day comes, it all seems overwhelming to you. Day trading is no different, but it is definitely a very good choice. It is a job that will motivate you because it will give you the opportunity to make money. Also, if you like working from home, it is a great choice for you. But don’t think it’s easy.
It takes dedication, a high level of concentration, and the capability to work under pressure. If you are capable of all this, you will be well rewarded. To make your first days easier and to explain what equipment you need, as well as what market to choose, we have written these tips for opening your day trading business.
What is it?
Day trading is trading stocks and other things within a single day, as the name suggests. The point is to find something that is cheap at the beginning of the day, and you expect the price to rise by the end of the day. Larger quantities are bought in order to make a profit, because it is not logical to expect that the value will jump within a day, that a big profit will be made from a small number of shares. This is considered high risk speculation, because in addition to the fact that you need a lot of knowledge and experience, you also need fair amount of luck.
So for this you have to be very concentrated and keep the focus at a high level. Because it can very easily happen that you make a very big loss in one day. Currencies and indexes are most often traded. You have to know how to assess well how the market will move and react on many various things, because everything happens only during one day, and then everything again from the beginning tomorrow. That is why this is a very mentally demanding job.
1. Buy a high-end computer
The first thing you need to start with is to invest in a good computer. You can also buy a laptop, but we think a computer is a far better choice. The reasons are various, but above all for the same money you get better hardware, it cools much better. So buy a quality computer, which above all has a fast processor. You don’t need a gaming computer to invest a few thousand dollars into it. You only need a computer with enough RAM memory and a fast processor, because the software you need is demanding. You may need 2 or 3 monitors, not just one, because you will have to monitor several things at once, so it is much easier on several monitors than to do everything on one, no matter how big it is.
2. Check your internet connection
You need a fast internet connection for this type of work, so check immediately if you can meet that requirement. If the internet is slow, you will not have a real insight into the movement of the stock market, because the information will be delayed. This can be disastrous for you, so provide high-speed internet before you start.
3. Buy a comfortable chair
You will spend all day sitting, so buy a comfortable chair. It is necessary for you to be comfortable and to sit in the correct position. An uncomfortable chair can have a bad effect on your concentration, and we have already told you that this job requires maximum focus all the time.
4. Choose a broker
You need a broker for several reasons. You need him to make your trades easier and do everything you need around them quickly. You also need him to help you when you need it and give you suggestions. What matters is that you find a broker who charges cheaper fees. And why is this especially important for day trading? Because you will have many more trades than people who deal with other types of trades. If the fee per trade is high, you lose a lot of money every day. Of course, do not choose the cheapest one also, make a balance between price and quality. What to look for when choosing a broker, read on DayTrading.com.
5. Learn as much as you can
You need to familiarize yourself with the market, to know what you are getting into and how to invest. Although you have a general knowledge of both the economy and the stock market, that is not enough. This requires much broader knowledge. You need to know how which event will affect the value, how which industry works and much more to be able to predict a raise in value during the day. That is why you need to constantly learn, read and inform yourself.
There is one great way to practice without risking your money, and that is a demo account. You will do everything exactly the same as when you start real day trading, but without endangering your money. Everything will be just a practice for what awaits you. Because it will be completely realistic, you will be able to gain a real insight into everything. That way you can create the right strategy and you won’t be overwhelmed with nervousness once you start working with real money.
7. Set clear goals and boundaries
If you don’t, you risk losing everything you have. This is especially important when you are starting out and have no experience. You need to determine the amount of money you will use that day and in almost no case spend more than that. Otherwise you can run into same problem like gamblers, who don’t know when to stop gambling. Also set a goal, to know what amount earned means enough for the day. Because if you don’t have a goal, then you will keep going until you lose profits and so on every day.
Don’t forget to check the legal regulations in your country. The most important thing is to be informed about taxes, but also other things related to profits on the stock market. Don’t let something like that ruin your job.