Decide Your Daily Schedule
To become a day trader, you need to have an excellent idea of how much time you can spend in front of the computer each day. If you think it will be more than 8 hours, go with technical analysis using charts and indicators as these require less interaction from you once they are set up. If you have access to the market for fewer than 2 hours per day, consider focusing on fundamental research when formulating trades: Scan economic news for relevant announcements that could impact the markets and predict their outcomes. If this means reading several pages a day about matters outside of your field of expertise, keep in mind that you can still stay away from the heavy-duty statistical analysis that traders usually do.
Set Up Your Workspace
So, you’ve decided to become a day trader. Great! But before you start buying and selling financial instruments every few minutes, let’s take care of some housekeeping: You need to set up an influential trading station where you will spend most of your time in front of the computer. This includes setting up charts illustrating the price movements (the best choice here is probably MetaTrader 4 due to its technical drawing tools), writing down buy and sell strategies (use Excel or Google Docs for this), implementing these plans via trade execution software (we recommend FXCM Trading Station II or Expert Advisor) and performing further research on market news. To become a day trader, you also need to make sure your Internet connection is stable and fast enough for your trading software.
- Test Your Plan
Once you have set up your workspace, it’s time to start testing whether a particular strategy works or not: You can do this by using demo accounts that most brokerages offer traders without risking any money on these trades. A word of caution, though: Stay away from brokers who have hidden fees and commissions as they could ruin all of the profit you might earn with their high spreads and excessive rollover rates. Instead, use FXCM as they provide free advanced services such as virtual private servers with streaming data for MT4 so that you don’t have to keep restarting the execution software every time your Internet connection blips.
Get Ready For Real Money
After testing your strategy on a demo account, you are now ready to start trading currencies, commodities, and indices with real money if everything has ended well! The process of getting set up for trading is the same whether you are dealing in stocks or forex markets: You need to open an account with a broker, look for good trade opportunities using price charts and news feeds (or by using special market scanners), implement your buy/sell signals via trade execution software and keep track of the latest news affecting the markets. Finally, ensure that you’re aware of any laws or regulations that apply specifically to day traders in your country before depositing money into your brokerage account.