Wandering Trader - Learning how to do day trading

Wandering Trader: How to do Day Trading.

Sun Oct 03 2021 09:55
Day trading involves the buying and selling of financial instruments frequently throughout the day. You may even buy and sell the same instrument a number of times. By learning how to do day trading, you will be able to become a wandering trader and can move all around the world as you work.

Find a Broker that’s Suitable for Wandering Traders

The broker you select has to meet certain conditions. Some brokers are better for long-term traders, while others are suitable for day traders. Here are some things you should check when shopping for a broker for wandering traders:
  • Transaction fees
As a day trader, you will be making lots of transactions throughout the day, so one of your key interests is to get low transaction fees. This way, you will be able to maximise your profits.
  • Execution Speed
You should also check the execution speed of the broker as this will determine your profits. If your assets are sold a little late, you may have to take a lower price. Similarly, if your broker completes a buy order late, you may have to pay higher prices
  • Customer Support
Since the trades will be conducted on the internet, you will likely need assistance at some point. For this reason, it is essential to pick a broker that has reputable customer support. The customer support team should be accessible via live chat, telephone, and email. Also, it should be available 24/7.
  • Variety of Assets
You should also work with a broker that has a variety of assets and markets. This way, you will be able to trade stocks, cryptocurrencies, and forex, among other assets.

Trade at the Best Times of the Day

Since day trading requires high levels of liquidity, you should consider making wandering trader trades when the stock and forex markets are open. This means you should trade between 9.30 am to about noon Eastern Time. The market is also extremely liquid and volatile at the final hour of trading, and this is between 3 pm and 4 pm Eastern Time.

Research Different Assets Thoroughly

As a wandering trader, you should explore a range of assets and markets. To make sure you don’t miss out on excellent trades, it is important to keep up with the latest stock market news. 

Also, you have to understand the impact of the policies made by the Fed and government and apply this knowledge to your trades. Also, you should evaluate the economy so that you determine how companies are set to perform in the future.

After carrying out research on different assets and markets, you should come up with a list of financial instruments that you would like to trade. You can then scan business websites and other platforms to determine whether those assets will go up or down.

Manage Your Finances

It is also important to manage your finances as this can determine how profitable your trading activity will be. To make sure you don’t lose your entire trading funds, you should only risk less than 2% of your funds on a single trade.

You should also set stop-limit prices so that you don’t end up selling at very low prices. Stop-limit orders simply mean that the asset will be sold when the price reaches a specific price.

Trade Smaller Amounts First

It is also important to start small as this will give you a chance to learn without risking a lot of money. You can set aside a very small amount of money to test the waters as you learn.

Also, focus on a small number of assets or currency pairs as this will stop you from getting overwhelmed. Nowadays, investors are able to purchase fractional shares, which means you can buy highly-rated stocks at very low prices.

Be Careful When Trading Penny Stocks

If you have settled on trading stocks, you may be tempted to purchase penny stocks as they are very cheap. However, you should remember that these stocks are highly likely to be delisted from the stock exchange.

Also, they are often illiquid since fewer investors want to risk their funds trading penny stocks. Before purchasing penny stocks, you should run thorough research and ascertain that the stock will be in high demand in the short term.

Which Assets Are Suitable for Day Trading?

As a wandering trader, you should also know which assets you can trade on the market. Here are some of the most popular trading assets for the wandering trader:
  •  Forex: Forex refers to the foreign exchange market, and it is extremely popular among day traders. This is because the market is highly liquid as large volumes of currencies are traded within a day. Since there is no central authority controlling the forex market, you can trade currencies 24 hours a day.
  •  Stocks: Although most stock traders use the buy and hold strategy, day trading can also give you excellent returns. As a day trader, you can speculate on stock prices via CFDs and spread betting, and that means you can also make profits on falling prices.
  •  Cryptocurrencies- Cryptocurrencies are also great assets for day trading as they can grow significantly within short periods. At the moment, the most traded cryptocurrencies are Bitcoin, Ethereum, XRP, Bitcoin Cash, and Binance Coin. The continued growth of these cryptocurrencies has attracted more investors, so they are great for all wandering trader trades.

Technical Analysis

Technical analysis is the tool that will help you spot trends in the market. This form of analysis is based on the theory that markets move in specific patterns, and these patterns repeat themselves over time. 

On the technical analysis charts, you will be able to get information on the prices, volumes, and times of the security trades. With technical analysis, you will be able to make predictions on the future prices of assets, and you can then apply this information to wandering trader trades.

Start Trading Today

With this information, you can start trading today as you learn the ropes. Remember to start with smaller amounts of money so that you avoid major losses. 

Also, select your assets carefully and follow them on trader blogs and other news sites. You should also sign up at XOSignals so that you get free travel traders signals. 

You can later upgrade to a paid account at XOSignals and enjoy other benefits. For example, the signals will be sent to your phone via SMS, thus giving you enough time to execute the trades.
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