One on one trading Coachon the stock market, that is to say buying and selling positions that only last a few hours, minutes, or even a few seconds, is tempting for a neophyte because the number of fluctuations is important during the day. However, even if it seems easy at first sight, it actually implies the acquisition of knowledge (therefore a lot of work), but also rigor, under penalty of transforming this activity into a bet like in the casino, or even into pure loss!
But for those who succeed, the practice is rewarding because in addition to being rewarded with hard currency gains, day trading involves learning many areas, including macroeconomics and geopolitics. It is therefore a question of properly understanding the major issues of our current world.
In this article, I share my advice for practicing day trading and know the reflexes and methods to put in place to trade on the stock market with confidence. The challenge is worth it, for those who want to get involved!
Tips for Day Trading Like a Pro
Choose Your Online Stock Broker
The first step is to choose a stock broker to carry out the operations. Knowing nothing about it, the beginner will first select a broker only according to the bid-ask spread, that is to say the difference between the bid price and the broker's ask price. However, brokers are well aware that this is often the only argument for which they are chosen. Know that this is not where they get paid. But let's be clear, it is normal for a broker to earn money because he offers you services: access to the market, the provision of a platform, the management of your orders, etc.
The beginner trader will also be able to sympathize with the “sales trader”, also called "coach trader”, because he is very friendly and looks tough in trading. Except that he actually has to trade, most often, only the appellation. It is quite simply a salesman who earns his crust by having clients open accounts. There is no trader at a broker, just employees who monitor the risks (for the broker) induced by the positions generated by the clients.
For years, the lack of control by market authorities (who only monitored stock exchanges) left the field open to certain brokers on OTC products such as CFDs and Forex. The latter have taken advantage of the gray areas of the regulations to have more or less questionable practices. Fortunately, there has been some cleaning up recently, with the arrival of the law and ESMA regulations.
But, in any case, you will send your savings somewhere. Therefore, do not trust the website of the broker, nor the chatter of the “sales trader”. It is a good idea to start by investigating the broker you have shortlisted and asking yourself the right questions:
And even a simple search on Google with the name of the broker associated with the words “scam” or “scam” can sometimes tell you a lot about the setbacks that certain clients have endured.
Know Your Market and Trade One Asset at a Time
The second step is to choose an asset to trade because, as in any business, you only excel on the stock market when you know your business very well. More concretely, since trading platforms offer the possibility of trading many assets (CFDs on shares, indices, commodities or currency pairs, etc.), I have already seen novice traders go from operations on several assets at the same time.
However, by operating in this way, they do not realize that they completely change the world each time they click on a different place, to buy or sell another asset. Each market, each currency pair has its particularities and different risks, sometimes very high.
Follow a Procedure like Every Professional Trader
This is a point often overlooked by beginners. Not to be confused with the strategy or strategies, the procedure is the modus operandi that the trader must follow scrupulously, whatever happens. Be aware that all professional traders follow one (even several).
It was established and drafted jointly by the head trader, the risk department and compliance. This Stock Market Fundamentals Course helps you to get educated more, What Makes a Great Technical Analysis Course?