In this article you will find a collection of day trading tips that you may find useful. Almost all IQ Option traders engage in day trading but not all of them know that it is actually called that way. Day trading is an act of buying and selling financial instruments within the same day, usually multiple times. Applied correctly, these principles can help you improve your trading skills.
1) Know the markets
This tip doesn’t apply to general trading procedures (though it is important to know and understand them) but rather to major events that take place daily. As you probably already know, important news and announcements have the potential to move the markets. Stocks and national currencies are particularly vulnerable to news-related price fluctuations. Keep in mind that even when trading on shorter time intervals, fundamental factors can still affect the outcome of your deals.
2) Allocate funds
The amount of money you allocate to each and every trade should be thoroughly calculated. You are not supposed to invest a fixed amount , neither should it be your entire credit. Rather, you could consider an investment not exceeding the amount of 3–5% of your total balance. Thus, you will protect yourself from the negative consequences of a losing streak, that sooner or later happens to all traders.
3) Set aside time
Day trading is a time-demanding pursuit. In fact, most successful day traders spend as much time trading as regular people working. Day traders do not have business hours and usually spend as much time monitoring the markets as possible. Day trading is not easy money and will require both your time and effort.
4) Time your trades
It is also important to pick the right moment to open your deals. Most experienced day traders enter the market when the volatility is high, which is usually in the very beginning of the trading session in case of stocks, indices, fonds and commodities. For Forex, things get a little bit different. Since Forex is traded 24/5 all around the world — with New York, London, Singapore and Tokyo being the most notorious exchanges — the highest volatility will be observed when more than one exchange is open. Certain experts, however, recommend novice traders to trade when volatility is, on the contrary, low in order to manage their risk. It is up to you to find the time that best suits your trading style and develop your trading strategies accordingly.
5) Stay realistic
No trading strategy will win in 100% of cases. Depending on the potential upside of the instrument you trade, it may be enough to win 60% or even 50% of all traders in order to stay in the money (but note that even then you are not guaranteed to win and all your capital might be at risk). The point is to win more than you lose.
These tips, if memorized and applied to your daily trading activities, can really make a difference.
