The first thing you’ll need to start day trading is a thorough trading plan and strategy. Once these are in place, you will need to open an account and deposit your funds – it is important to have an adequate amount of funds to cover the margin requirements of any positions you open.

If you're going to trade on margin you'll also need a lot of cash on deposit with the broker. This is not recommended for a beginner as it carries a high risk that the trader will wind up broke and deep in debt. How To Day Trade For A Living: A Beginner’s Guide To Trading Tools and Tactics, Money Management, Discipline and Trading Psychology by Andrew AzizMargin account –This type of account allows you to borrow money from your broker. This will enable you to bolster your potential profits, but also comes with the risk of greater losses and rules to follow. If you want to start day trading with no minimum this isn’t the option for you. Most brokerage firms will insist you lay down a minimum investment before you can start trading on margin. You can also experience a margin call, where your broker demands a greater deposit to cover potential losses. Predictably, the Financial Crisis of 2007–2008 and subsequent bank bailouts greatly eroded the public confidence in the centralized financial system. If you’re FTSE day trading, you’ll be buying and selling the shares of companies, such as Vodafone and BP. In the day trading forex market, you’ll be trading currencies, such as the Euro, U.S dollar and Sterling (GBP). In the futures market, often based on commodities and indexes, you can trade anything from gold to cocoa. Ask yourself: how much exposure are you willing to take on a single trade or over one trading session?

Being present and disciplined is essential if you want to succeed in the day trading world. Recognising your own psychological pitfalls and separating your emotions is imperative. Trading in shares means you’re using a platform like ours to speculate on the share price of a public company and whether it’ll rise or fall. You can trade shares with us, and you’d do this using spread bets or CFDs. Another option is to fade the price surge. Here, the aim is to identify when trading volumes will start to decrease. Scalping Patience – if you don’t achieve results in a month’s time, it doesn’t necessarily mean you are a bad day trader. Rather, you should further educate yourself and tweak your trading strategy.

Speculative/similar to gambling activities– Day trading profits would likely be totally free from income tax, business tax, and capital gains tax. A momentum strategy can involve trading on news releases, such as Facebook changing its name to Meta and investing in the Metaverse. As part of this day trading tutorial, our experts have listed their top tips for new day traders: Start Small Experienced scalpers and day traders prefer the margin account, as they can make small trades to yield larger gains. Furthermore, take note that FINRA instituted some restrictions on margin trading accounts in 2001, following the dot-com bubble burst. One of them is the pattern day trader rule (PTD).

Bollinger Bands– They measure the ‘high’ and ‘low’ of a price in relation to previous trades. They can help with pattern recognition and enable you to arrive at systematic trading decisions. Fortunately, as shown in the movie “The Big Short” featuring Christian Bale as Dr. Michael Burry, it was a rather unique event that is not likely to repeat. Another growing area of interest in the day trading world is cryptocurrency. Day trading with Bitcoin, Litecoin, Ethereum and other altcoins is an expanding business.

Professional account– This is an option for trader who can prove a certain level of experience and trading capital. Professional traders can remove the restrictions that European regulators have placed on retail traders. This means UK traders can still access leverage levels of 1:500, rather than the ESMA (European Securities and Markets Authority) imposed limit fo 1:30 for forex and 1:2 for cryptocurrencies. Understanding these trading patterns, as well as ‘triangles’, ‘head and shoulders’, ‘cup and handle’, ‘wedges’ and plenty more, will all make you better informed when it comes to employing your trading strategies. Whilst it may come with a hefty price tag, day traders who rely on technical indicators will rely more on software than on news. Whether you use Windows or Mac, using the right trading software from home will have: How To Day Trade: A Detailed Guide To Day Trading Strategies, Risk Management, And Trader Psychology by Ross Cameron