Our analyst Axel Rudolph’s tips on how to become a day trader
To become a day trader, you can start by choosing a broker and setting up an account that allows active trading. Some important factors to take into consideration when making your decision include the markets, hours and tools offered by the broker. With us, you can practise spread betting and contract for difference (CFD) trading on a demo account using virtual money, without risking any real money.
To set yourself up to trade comfortably, you can use a powerful computer and multiple screens. Additionally, fast internet will help enable quick trade execution.
Once you’ve taken care of all of these, you can plan how you’ll fit market analysis and trading into your schedule.
It’s important to be prepared for challenges. For example, the short duration of trades can be mentally exhausting and small mistakes can become costly.
While you can mitigate your losses using risk management tools such as stop-losses, it’s also important to keep learning from both profitable and losing trades. By drawing up a trading plan and refining your strategy when you see fit, you’re increasing your chances of favourable outcomes.
You can also aim to mitigate your trading risk by deciding on a maximum percentage of your total capital to risk per trade, eg 3%.
That said, it’s important to keep in mind that day trading isn’t for everyone. Longer-term investing, ie buying and holding, can be useful if you’d like to gain experience before diving into the fast-paced world of day trading – in general, it’s also less risky and less time-consuming.
