If you have ever been in touch with the world of trading, there is a high chance that you have come across the term day trading. It’s an act of making single or multiple online trades within the same day to yield maximum profits. Now, the thought of making profits in such a short time sure seems exciting, it also might prove out to be disastrous for your investment portfolio if you are not equipped with the right knowledge and strategy to handle such trades. Lucky for you we have put together a short guide to help you understand and explore day trading in Dubai.
Whether you are new to the world of online trading or a seasoned trader looking to try their luck at day trading, here is a detailed guide about how you can get started.
You could make day trading a part time hobby or even a full time job that pays your bills, either way you are going to need a lot of practice before you jump in and put your money at stake. That’s what demo accounts are for. You can get hands-on experience in a demo account and understand the basics.
Some trading sites have incredibly advanced demo accounts that simulate the real time trading scenarios where you can try out different strategies. So be sure to thoroughly explore a demo account first.
Test the waters
Once you have gotten some hands on experience in a demo account, you are going to feel a lot more confident than you would as a novice who has only read about some hypothetical situations in day trading. But don’t let that confidence get to your head just yet and go small initially. Take the baby steps and invest a small amount initially.
Some day traders invest in multiple stocks to get the most bang for their bucks but that requires years of experience and knowledge in trading since it’s not easy to concentrate and keep tabs on multiple stocks at the same time. As a beginner it’s recommended that you focus on one or maximum two stocks to avoid yourself from getting distracted.
Any professional trader would acknowledge the fact that the market is at its boom early in the morning when it opens and right before it closes down. The hyper activity during these times translates into price volatility. A seasoned trader with an extensive portfolio understands these patterns and make a move to benefit from it but as a beginner it’s better that you wait it out till the market settles down and the prices are a bit stable.
Steer clear of penny stocks
Penny stocks are the most unstable ones. It’s natural to get tempted by them but it’s better to pass on such stocks especially if you are a newbie.
Remember, investing in stocks is not for the light-hearted, it’s going to test your nerves at times. Don’t let emotions get the better of you due to a price hike or a dip for that matter. It’s important to keep your cool amidst uncertainty to make decisions you won’t regret later.