A lot of people start day-trading as a side-job in order to give their finances a slight boost. Still, the fact that you are doing this aside from having a day-job doesn’t mean that it is something that could be done half-heartedly (at least not with a satisfactory result). So, in order to become a better online trader, you need to find a way to grow professionally. Here are five simple tips which just might help you achieve this goal.
1. Set your price targets
While you cannot affect the way in which the stock you are investing in is going to move, what you can do is set your price targets (stop points). These points are the gain/losses at which you should forfeit the current trade. For instance, if you set your stop-loss point at 1 or 2 percent and your win-stop at 6 or 7 percent of your entire account balance, you can easily stay profitable with as little as 30 percent successful trades. This is particularly important to do early on, seeing as how people often get emotional once they start winning or losing large quantities of money. Needless to say, making important decisions while your judgment is impaired is definitely not a good idea.
2. Don’t put too much hope in a simple trade
Perhaps the most important trait that one has to possess in order to succeed in this game is patience. Unfortunately, a lot of people expect to get rich overnight, which makes them overinvest and put too much capital on a single trade. Sure, this could yield a great ROI but it could also ruin you entirely. One of the most common tips is to usually put between 2 and 10 percent of your budget on a single trade. This way, you can easily bounce back even after a massive failure.
3. Equip yourself properly
Another thing you need is all the necessary tools for trading. Luckily, in 2017, finding your place on the market is not nearly as difficult as it used to be. With the right platform, you can easily monitor stocks and other traders alike, and have a much simpler and more efficient method of copy trading. Furthermore, the option of remote auto-trade allows you to control your assets on the move (from a laptop, tablet or a smartphone). This way, you can oversee your standing on the market 24/7 and make important decisions on the move. In other words, these tools have the power to turn you into a more efficient social trader.
4. Look beyond stocks
A common mistake that a lot of inexperienced online traders make is focusing exclusively on stocks. Those with a bit more thorough knowledge of the market, however, could easily make a fortune trading on forex, futures or options. Furthermore, this will give you an excellent opportunity to hone your skills even on the days when your stock situation appears stagnant. Needless to say, diversification of your actions is great advice for any other line of work, not just stock exchange.
5. Select a trading strategy
Finally, in order to try and make your trading efforts as reliable and constant as possible, you need to decide on a trading strategy. Even though this is often advised to new traders, even some of the biggest names in the game adhere to this rule. Here, you have to choose between strategies like momentum trading or swing trading. Still, in order to see the full effectiveness of a particular strategy, you need to persist for at least a year.
Like in any other line of work, with experience and self-improvement efforts, you will grow professionally. Once you reach a certain level of proficiency and your income becomes big enough, you might even leave your current day-job for good and become a full-time online trader. You would be surprised at just how often this actually happens.