It doesn’t matter whether you take your first steps in the financial world, or you already have experience. There is a high probability that on the way you meet or have already met the term “day trading”.
In the past few years, day trading has benefited from what has become popular, mainly due to free internet access, the use of smartphones and the potential huge profits in a relatively short amount of time. These factors allow private investors to make decisions faster during the day, no matter where they are.
Traders are free to choose the degree of day trading that suits them. Pure day-trading involves buying and selling assets, and ending the session directly with making a profit, instead of opening positions for the night or longer.
However, day trading is not suitable for everyone, and private investors should understand this before doing this as the main type of trading. And this is why:
Large initial investments
Day trading is not for newbies, even if many blogs claim otherwise. First, you should already have experience in trading. Secondly, day trading implies completely different initial investments. Although you can open a trading account for a small amount of $ 5 and work for the most part with a margin, the amount is important for day trading. The typical day trader is looking for short and very short trades where movements are limited to a few pips. To benefit from a small price change, you need to make a large bet.
Mandatory conditions for a successful day-trader – financial knowledge and experience. However, the principle of “memorized by memory” does not work here, here you will have to learn every day. There is one more necessary thing – self-discipline. After all, more often than not, you will have no one to tell and you will have to find out everything yourself. And yet, we strongly recommend finding forums, meetings of traders and someone with whom you can chat.
Capital Management Difficulties
It is important to note that day trading is a risky venture and you must be prepared for the worst. In practice, this means that you may have a series of unsuccessful transactions. Maybe 3, maybe 10, and only then the recovery will begin. This is what underlines the importance of proper money management.
Day trading involves a large number of transactions every day, which results in higher commissions. If you are planning to start a dey-trader career, you need to take this fact into account. You can get acquainted with the types of accounts provided by FortFS in order to understand which one will suit you better.