The internet is making it far easier for normal people to get a start in day trading. Far from being the Wolf Of Wall Street, all you need to get started is a bit of research and a smartphone or laptop.
It’s becoming an increasingly popular way of making money. While not without significant risks, it is still possible to earn good money from day trading.
So what is day trading?
The main differentiator between day trading and other forms of trading is that you do not hold on to assets for any period of time. Assets are bought and sold in a single day, each day starting clean.
The gains are incremental, taking advantage of small market changes rather than holding on to them and waiting for a substantial market shift.
UK day traders often trade in:
Cryptocurrency
This trading has become more common over the past few years. Cryptocurrency isn’t limited to any exchange market so can be traded 24/7. Ensure to find the bitcoin exchange with the lowest fees to maximize your returns.
Shares
This is a popular starting point for people getting into day trading. By ending the day holding no stocks, you remove the risk of huge overnight market moves should something happen in the world that immediately affects stock prices.
Forex
Forex (or foreign exchange) is the changing one currency into another and taking advantage of small movements in the value of said currencies.
Indices
As with share trading (and unlike crypto), indices can only be traded during certain hours. Indices differ from shares in that you aren’t baking on the fortunes of a single company, but on a group of shares (for example the FTSE 100).
Understanding Market Factors
When getting into day trading, you are going to have to take the time to learn about the ins and outs of day trading including:
Liquidity
High liquidity is needed by day traders to be able to enter and exit a trading position.
Volatility
Day traders have to consider the volatility of an asset. This is how quickly the price moves, creating the opportunity to exit the position for a profit.
Volume
The trading volume refers to how often an asset is bought or sold during a particular time period.
What Do You Need To Start Trading?
Before you begin day trading, you’ll need to do your research and develop a trading strategy. Then, pick your trading platform and open an account. Depending on which platform you choose, there are different minimum values you need to deposit to get started, some from just a few pounds.
A lot of platforms lets you practice by letting you virtually trade on a demo account that isn’t live.
Conclusion
Day trading can take a while to get the hang of, but there are many resources online that you can use to learn about it. Get comfortable using the platform demo accounts and before you know it, you’ll be making your first live trade.
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