The rising cost of living and stagnating incomes have impacted everyone’s lives. Millions of people have therefore turned to side jobs to supplement their monthly incomes. A so-called “side-hustle” can be anything from selling second-hand clothes online, to taking on an extra job, trading, or even starting a new business. However, with the democratisation of trading tools and the rise of trading platforms in the past years, trading and investing have become a popular side hustle. Many beginners are starting their side hustles in day trading, and are on the look-out for the best day trading tips and practices to help them as they learn and grow as day traders.
Seven of the Best Day Trading Tips for Beginners
To help you get started with your own trading side hustle, we’ve compiled a list of our best day trading tips, worth referring back to as you start building your day trading business.
Tip 1: Always use a trading plan
It is important to have a clear plan in place before you start day trading. This should include your goals, risk tolerance, strategy, and capital. Thanks to modern technology, it’s simple to test a trading strategy without risking actual money. Back testing is a process that enables you to test the viability of your trading idea using past data, and your strategy can be applied on a live trading account after being established and back tested first.
Tip 2: Treat trading like a business, not just a pastime
Unsuccessful part-time investors frequently commit the same error – treating investing like a hobby. Following your friend’s advice or your gut feeling when it comes to trading will waste your money, just as it would when running a business. The goal of your day trading strategy should be to become as professional as you can, which entails developing and adhering to systems. What procedures do you have to set up if you were starting your own business? It’s likely that your side business in the stock market would follow the same guidelines.
Tip 3: Start small
Perhaps one of the best day trading tips for beginners is to start small. Day trading can be risky, so it’s important to start small and gradually increase your trading size as you gain experience, become more comfortable with the process, and earn returns to reinvest.
Tip 4: Stay disciplined
Another one of the best day trading tips for beginners to help you on your journey to day trading success is to remain disciplined. It’s natural to get emotional when day trading, and emotional trading is a risk for any trader, experienced or not. As such, it’s important to learn to stay disciplined and stick to your plan. This means not letting your emotions guide your trades and not deviating from your strategy.
Tip 5: Have risk management in place
There are several risk management tools and mechanisms worth leveraging to help you reduce and manage your trading and investment risk. One example is stop-losses. A stop-loss is an order to buy or sell a certain stock once it hits a predetermined price. It is intended to reduce an investor’s loss on an investment in a security; for instance, placing a stop-loss order 5% below the price at which you purchased the stock will only allow you to lose 5% of your investment.
Tip 6: Learn from your mistakes
Trading is not as black and white as it might seem. For example, you can lose money on good trading decisions and vice-versa. To not make the same mistakes over and over again, it is important to understand your trading mistakes. The easiest way to do that is by setting up a trading journal, documenting all trades and identifying patterns that lead to losses.
Tip 7: Have patience
Of all the day trading tips we can offer, this is perhaps the best: day trading is a marathon not a sprint. Don’t expect to get rich quick, but with dedication, discipline and patience, you can grow your day trading side hustle into a successful business and all your efforts and lessons learnt will pay off. Be patient and remember to keep a long-term perspective.
If you want to become a successful day trader, it’s worth keeping these seven best day trading tips in mind on your journey to trading success. However, there is one more thing you could do to give your day trading side hustle that extra boost, and that’s benefitting from someone else’s expertise.
With ONE-SIGNAL, you can establish a profitable trading side hustle more easily, as we provide you with the trading tools you need. Daily LONG or SHORT signals are sent to our subscribers at the same time each day and include a stop-loss, which is an integrated risk management tool that comes standard with our solution. Since trades are entered and closed at the same times every day, traders can easily establish a trading routine by entering and exiting their positions at the same time every day and then going about their usual activities, while achieving their day trading goals, one bit at a time.
Why not find out more about how ONE-SIGNAL can support you on your trading journey?