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How Much Money Do You Need to Be a Successful Day Trader?

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How Much Money Do You Need to Be a Successful Day Trader?

Day trading is intraday trading, which presents from itself a set of short-term transactions on the stock exchange. The key condition is that all of them open and close in one day and not a single one is transferred to the next. Due to its universality, the approach applies to any market, taking into account its capabilities.

This approach is entirely different from many others, but it doesn’t require any additional money inputs. You don’t need to have a significant sum. You can start with any amount of money, depending on the platform you will choose. The main resource you should possess is time, and you will understand why as soon as you learn more about this strategy.

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Strategies of Day Trading

The main strategies are:

  • scalping;
  • trade based on the news;
  • technical analysis;
  • VSA analysis.

Let’s see what they mean.

1.    Scalping

It is one of the simplest options that even newcomers can try. All that is necessary is to establish a plan for closing positions and clearly follow it. For example, when setting 3×3, the transaction will be closed when the trend’s position rises or falls by 3 points. The crucial point is to follow the plan strictly. Often it is tempting to move the lower foot when it is necessary to fix a loss, but in this case, scalping turns into intuitive trading, which in 10 situations out of 10 will lead to a drain on the budget.

2.    Intraday trading based on the news

The strategy is no less widespread than the previous one, but it is fundamentally different and requires the development of individual skills. Numerous instruments are sensitive to the news background and can quickly react with price movements to particular events or statements by key figures.

A great example is Elon Musk. Repeatedly, his posts on his personal Twitter provoked a drop in Tesla stock prices. This led to the fact that the board of directors banned him from making posts without the consent of the company’s lawyers for each individual message.

3.    Technical analysis

The strategy is less popular, as it requires more serious preparation and experience. It provides a detailed analysis of charts, which also takes a long time and reduces the number of transactions you can make during the trading day.

Regardless, technical analysis skills are useful during scalping to determine the best entry points. Traders who have gained experience use it in other approaches to trading and show high results in day trading if some other conditions are met.

4.    VSA analysis

A relatively recent strategy that relies on trading volumes as a key indicator. Positions, as a rule, are opened at the moments of increasing volumes, which provoke a rise in prices. If you want to try this approach, you should pay attention to the instrument’s volatility. The higher it is, the more profit can be fixed at moments of increased demand if you open a position on time.

If you don’t know anything about Forex trading, check the Forextime blog: it will provide you with all the necessary information on stocks, strategies, MetaTrader 5, and so on. You can access the platform from any country of the world, be it Australia, Nigeria, or France.

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Performance of Day Trading

The first and most important is the psychological aspect. During intraday trading, profits are observed much more often during transactions. In the background, it is easier to follow a clear strategy and fix losses where it is necessary. Closing all transactions in one day, you can immediately summarize and see the results.

Day trading does not depend on global news. Traders are trading for a long time when the markets are widespread. They count on the correction and the continuation of the movement. At this time, those who trade during the day close positions and open opposite ones.

The Disadvantages of Day Trading

The biggest disadvantage of this approach is the huge amount of time you need to spend on the market. It is necessary to constantly keep the hand on the pulse, to follow many schedules and constant price changes. Monitor news and speed up quickly open positions. This temp is not suitable for everyone, and with inadequate training, it is easy to lose control and part of the budget.

Many traders allow for more regular work with fewer operations, which are more extended over time. The revenue directly depends on the number of closed transactions. Day trading is about a volume, but the more they are closed, the stronger the trader is tired. This approach to work on the market is not a problem, and, at least, you need to get used to it.

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