If you want to get into investing and trading, then it can be a great side hustle to have, or even just to have as a hobby. However, it isn’t something that you should go into lightly.
Of course, it can be very possible to make a living out of doing this, with it only taking a few hours out of each day. But that isn’t going to be instant, which is why coming at it from a hobby point of view can be the best place to start.
There will be some ups and some downs, and one of the starting goals to have would be to simply not lose anything. If you want to get into day trading, then here are some of the things that you will be glad you will have known, before getting started.
Start off in the right way and it will help you along the way.
Learn a Strategy
Day trading is not something to start that you just feel like going on a whim. It does need some effort, knowledge, and practice, as having a strategy to help you will help you to have an advantage.
One thing that you can do is to start by watching live charts which can be found online, to look out for moving assets. You could also use a day trading app for this kind of thing, though you may be unsure of how to find a day trading app.
Again, looking online is the best place to start. Then, as you watch it, you will learn and experience more, without the pressure of money being involved for you at that point.
It is a good idea to ask yourself a couple of questions as you watch, as it can help you to learn a strategy that you can then go on to use. First of all, how would you get into doing a trade?
Then, how would you be able to get out of a trade, for one that is doing well, as well as one that isn’t doing well? Think about how much risk you could put on any trades, and think about how many shares of stock you would be looking at.
Then, one of the final thoughts when looking at this, is if the trade you would have hypothetically taken, has been a profitable one? After doing this a number of times, what does it show about your strategy?
One way to see if a method works well is to use the same method for a variety of trades, and see how the results vary, if at all. You can then create a strategy by looking at what works best for you, or looking at someone else and learning from them and their trading decisions.
Practice a Lot
Practice, practice, and more practice; it is something that is really key for a lot of things that you want to learn, but is an essential part of day trading. Even doing your normal day job, you will be asked to practice a variety of things over and over again, perhaps even before you do it for real. So this is going to be vital when you’re thinking about trades with actual real cash.
To get yourself started, it could be a good idea to practice with a demo account, or by just looking at live trades, as mentioned above, before you think about using real money.
Then you can see how things go, and what would have happened to the cash, if it was a real trade. You will find that no two trades are going to be exactly the same, and at unprecedented times in the world, you never know what exactly is going to happen.
But if you don’t do any practice, then you won’t spot any of the warning signs, or any of the signs that you should deviate from your normal trading plan. Know what you’d do and then learn to perfect it.
Consider Goals and Constraints
Getting into day trading is something that will take time, especially as you learn it all and practice, in order to perfect your strategy. To start off with, it can be a good idea to think about some of the following:
- Do you have capital in order to day trade? If not, then it can be a good idea to wait a little time until you do have enough. Practicing can be a good thing to do in the meantime.
- Being able to get to a point where you are making money, and doing so consistently, can take quite a bit of time. It could even take you up to a year! It is going to take you even longer if you only dip in and out of this at the weekend, for example. So you need to think about how much time you will be able to realistically commit to it. If you can’t commit a lot, then you can still do this as a hobby, but you need to manage your expectations.
- When you are ready to start trading, then will you be able to commit to doing this around your other commitments? As with the point above, you just need to be in a position to manage your expectations. If you’re getting into this because you want to quit your current job, then you need to be able to commit a lot of time to it, for example.
- Think about your strategy and how it needs to fit in your life. If you have a long-term plan, then dipping in and out can be fine. If you are choosing quite a reactive strategy, then you will need to be paying close attention most of the time, in order for it to work best for you. So think about what you’ll do and how it will all fit in.
Having thought about all of these before you get started with trading, is going to save you a lot of time, as well as money.