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Becoming a day trader does not have to be a full-time job. New investors with less experience have recently started buying and selling shares on the Australian stock market using smaller deposits. And many of these “newbies” are making profits without implementing well-rehearsed, detailed strategies.
News-based trading
If you are thinking of investing in stocks but are not sure where to start, following the lead of more experienced analysts and traders is recommended. Reading the latest stock opinion on a reputable, independent news site will detail current trends and opportunities for you to make moves in the market.
These sites also feature the breaking news about stocks and investing and share tips and broker comparison and reviews. You can use all these free resources to ease yourself into trading.
Copy-trading
After signing up with a broker to execute trades, you might be able to access more advanced features. Copy-trading is one of the most useful for new investors as it allows you to track and copy the trades that other investors make. Rather than just mirroring specific strategies, it copies all trading actions such as opening a position and executing stop losses.
Before these forms of social trading, every investor had to rely on their own fundamental or technical analysis to get ahead. Copy-trading and mirror-trading effectively shorten the learning curve as you will be able to interact with others and duplicate their actions. However, you need to approach copy trading with caution as you can lose money if another investor’s moves are unsuccessful.
Trade with trends
A simple strategy to follow when you first start out is “trading with the trend.” This is where you try to make gains by trading based on the direction of a specific stock. Usually, when an asset is moving higher, investors opt for a long position with the expectation of the stock rising in value. Short positions are generally reserved for assets trending downwards.
This is a straightforward approach to trading stocks, but you will still need to conduct research and analysis and use news sources to identify trends. If you can get to grips with moving averages and momentum indicators, you should be able to make wise, informed moves on the market.
Start small
New traders are eager to turn their deposits into significant profits, but the desire for quick gains can often lead to erratic moves on volatile stocks early on. Instead, you should focus your efforts on a few viable stocks that will lay the groundwork for at least medium-term success. Trying to manage a variety of different stocks and taking aggressive positions can complicate your strategy. This can lead to confusion and losses.
While day trading does not have to become a new career straight away, you should devote enough time to implement a well-researched and relevant strategy that can help you get off to a good start. By keeping it simple, you will keep your account intact and give yourself the chance to make more gains in the future.