To be a successful trader is not a day’s job. It requires patience, some knowledge of trading, and funds to make trades. For those who have never traded before, trading can make them confused. They get confused when it comes to which strategy to use because they want the best strategy that will give them profit.
However, there are various ways traders can trade to make money. They include day trading, swing trading, and many more. This is why Nikit Shingari explained the basics of day trading. Nikit Shingari is a skilled and successful day and swinger trader. In his words, “there are no strict rules to trading. Learning how to trade and trade depends on the learner’s learning speed and ability.”
Brief Introduction of Day Trading
Day trading is a common type of trading method in the investment world. Lots of people prefer day trades to other forms of trading. It can be defined as when a trader buys and sells shares or other assets within 24 hours. Day traders can buy and sell any assets that are available for trading. Digital currencies, stocks, commodities are examples of things to day trade.
Day trading means that whatever asset you buy will be sold within 24 hours when the trades end.
Although you can buy and sell within a few hours, it is not as simple as it sounds. It is quite a risky venture because of the short trading time. Day traders can lose as much as they gained, it all depends on their trading strategies. Hence, risk mitigation and management are important factors to consider in day trading. Risk mitigation involves learning the best day trading strategies by the day trader. Learning gives you knowledge, and knowing what you are doing goes a long way in reducing trading risks.
Day Trading Basics
According to Nikit Shingari, day traders need to know the basics of day trading. It is better to know them before you commence trading. A day trader needs to know what a candlestick, chart, and indicator are.
What is a candlestick?
There is more than one candlestick in trading. A candlestick represents the price of stocks a trader wants to buy at that particular time. Its features include a body, a down, and an upper wick. Candlesticks are produced every day for each trading period.
A Chart
A chart shows what is happening during a particular day trading period. It gives details of what is going on in the day trading market. Traders can find a candlestick in a chart because the chart also shows the prices of assets. Similarly, traders can find indicators in the chart. Basically, a chart encompasses a candlestick and an indicator. It is where people analyze and make trading decisions (whether they should start or stop trading)
What is an indicator?
All trading and investments depend on the prices of assets available for trade. Moreover, if the demand for an asset is high, its price will be high. Similarly, if the demand for an asset is low, its price will not be high. All these will be shown on the chart by an indicator.
Therefore, an indicator can be described as a measurement that measures the highs and lows of a market. If the market situation is high (good) traders can trade, but if it’s low, traders will stop trading. An indicator indicates the quantity of a particular asset available for sale and its price range.
Types of indicators
They are of four types. Namely:
- A Volume Indicator: It indicates the volume of trades a price change brings. It is also used to verify trade directions.
- Trends Indicator: A trends indicator measures the strengths and directions of trading trends.
- A Volatility Indicator: It measures the price rates of an asset.
- A Momentum Indicator: It shows the rate the price of an asset moves at a particular period.
Day Trading Strategies
Many day trading strategies yield good results.
They are:
Algorithm Strategies: Traders depend on advanced algorithms to find out how inefficient a day trading market is.
Range-Strategies: Traders can find out how many traders support and oppose an asset available for trading. This will aid the trading decision-making process.
Media Strategies: Traders use the amount of news hype that surrounds an asset to determine trading decisions. If the news hype an asset so much, more traders will buy that asset.
Scalping-Strategies: It involves trying to take advantage of little price changes that occur in a day to make profits.
Day Trading Tips
Learn the basics of day trading
Before you begin your trade, know what you are doing. Learn about the market trends and the effective strategies to use. You might end up losing your funds if you don’t do this. Learn how to read charts, candlesticks, and indicators. Find out if there are risks associated with the asset you want to buy.
Have Enough Funds: Traders should have adequate funds set especially aside for trading. If you only have one source of income, pay your bills first before you think of trading. If you have some money left that you don’t mind losing, then trade with it. Many people make the mistakes of trading with money they couldn’t lose. In the long run, they didn’t make profits from their trades. This has led them to have no money left to eat and pay bills.
If you want a huge return, you need to invest a huge amount of money. Hence, make sure that you have enough money for trading at your disposal.
Trading Strategies: What kind of strategies can you employ to trade successfully? This is the most important question in the minds of traders. Every trader wants to be ahead of other traders. The type of strategy you employ will determine if you will lose or make a profit. So choose a strategy that can give you profits and reduce trading risks.
In conclusion, day traders should be prepared for any risks that may occur. According to Nikit Shingari, they should understand the basics of day trading and its strategies. Remember, to make profits sometimes depends on luck too.
