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Are you stuck at home, bored of Netflix, and without a home gym setup? This might be the perfect time to learn day trading. Here are four essential steps to get started with day trading for beginners.
With many people worldwide facing lockdowns and social distancing, finding productive activities can be challenging. Many have reached out via social media, asking how to start day trading.
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How to Start Day Trading as a Complete Beginner
This guide is designed for complete beginners, sharing personal recommendations on how to embark on this journey.
Step 1: Open a Paper Trading Account
Paper trading allows you to trade with simulated money, providing a risk-free environment to learn. If you’re new to the market and unfamiliar with candlesticks, technical analysis, SEC filings, or news analysis, paper trading is an excellent starting point. Here are some recommended platforms:
- Thinkorswim: Free for U.S. residents; Canadians need a $5,000 USD account maintenance. It offers an “On Demand” feature to backtest historical price action.
- Interactive Brokers: Available for both U.S. and Canadian residents. A monthly data subscription costs around $20.
- Webull: A free, intuitive platform with both mobile and desktop versions. It offers extended hours trading and options trading. U.S. residents can receive two free stocks upon signing up.
Step 2: Utilize Free Resources
Instead of spending money on expensive courses, start with free online resources. YouTube offers a plethora of content on trading strategies, market analysis, and weekly trade reviews.
This approach helps you understand the effort required for successful day trading without significant financial commitment.
Step 3: Journal Your Trades
Spend 5-10 minutes daily logging your trade entries, exits, and setups. Tracking your trades helps you identify your strengths and weaknesses. Are you more successful with long positions or short positions?
Do you prefer large caps or small cap penny stocks? Understanding these patterns through journaling is crucial for refining your strategy.
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Step 4: Join a Trading Community
After practicing with paper trading, free resources, and journaling your trades, you may decide to pursue day trading seriously. Joining a community of like-minded traders can provide live guidance during market hours.
While free resources are great for starting, premium educational services can accelerate your learning curve by teaching nuanced aspects of trading, such as news headline analysis and market movements.
Conclusion
Day trading is challenging and requires dedication, discipline, and continuous learning. Avoid falling for get-rich-quick schemes and lifestyle marketing. With hard work and the right resources, you can gradually build your trading skills and potentially achieve success. Remember, it’s a journey that demands effort and persistence.
