We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What are the Best Tips for Online Day Trading?

By Carrieanne Larmore
Updated: May 17, 2024
Views: 2,465
Share

Online day trading can be a profitable venture if certain precautions are observed. Prospective day traders should practice before using actual money and become very familiar with their selected trading platform. It is also crucial to avoid becoming emotionally invested in stocks and to create an effective exit strategy. Other important tips include starting small and staying well informed on developments throughout the day.

For the prospective day trader, simulations are available online, or paper can be used to track performance. It is important to decide on a trading platform and become familiar with its features. The dashboard can be used for practice trading, but the deals should be finalized on paper instead of initiating a real transaction. All terminologies, graphs and tools should be very familiar before any money is invested.

It is also important to not become emotionally invested in stocks and to create an exit strategy. Becoming emotionally involved can cause irrational decisions to be made about when to sell. To help overcome this, stop-loss orders should be placed so that more than a specified loss on any stock cannot happen. Successful traders do not hold onto a losing position in hopes that the market will eventually go as they originally predicted. Setting stop-loss orders is a strong exit strategy to ensure that a small loss does not turn into a big one.

Starting small is important in online day trading. Even though more money can be made by having a larger position, it also involves more risk. Starting with a low number of shares, such as 100, can minimize risk. More shares can be purchased in small increments as stock prices begin to rise. The price per share will average a little more, but the risk of the entire investment will be minimized.

Staying well informed on developments throughout the day is essential to successful online day trading, otherwise it is simply gambling. Day traders must keep an eye on technical analysis graphs and watch for news releases. It is important to sort out reputable sources from the rest to ensure trading with top quality information. A great deal of real-time information must be absorbed and analyzed throughout the day, so it is key to stay focused and concentrate on what is important.

Other general tips include protecting an online day trading account so that the risk per trade is not too aggressive yet not too conservative to the point where returns are not optimized, not letting fear cause an untimely sell or purchase, and not dwelling or blaming anyone for losses. It is important to learn from past mistakes and avoid repeating them. With practice and experience, online day trading can be a successful venture.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Editors' Picks

Discussion Comments
Share
https://www.wisegeek.net/what-are-the-best-tips-for-online-day-trading.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.