Day traders have it so lucky these days. It is so much easier to trade nowadays compared to a decade ago. Nowadays you can trade directly online. As long as you have an account with an online trader, you can buy and sell stocks without the need to talk to your broker. With online trading, you post your request to buy or sell, and you would get a confirmation when the transaction is done.
However, even if trading stocks has become easier and faster, you still have to do your homework before you go around making any trades. One problem with having a faster and easier access to trades is that you can also lose opportunities fast, and lose money even faster. As an investor, these are some trading tips, which are specific to online trading that you should watch out for and follow, to make sure that you get the best opportunities.
1. Study your stocks
An investor has a responsibility to himself to make the best possible trade at the best possible time. It also depends a lot on his overall investment strategy. Day traders as a general rule, buy and sell stocks daily. In contrast, institutional investors typically hold their stocks for the long term.
Since the day trader commits to buy and sell daily and earns from the stock movement, he has to probe deeper into the stocks he is interested in. Usually, he is interested in those stocks, which are fast moving. These are the stocks that move everyday. In which case, these are also the same stocks, which are popular for other investors. There is a tough market for these stocks. Other day traders will also be making buys to take advantage of the movements, and earn in the process.
To stay ahead of other traders, as well as institutional buyers, you have to know when to buy and when to sell, every moment that you have the stock.
2. Movement is always too fast
The bulk of stocks are bought by institutions. These are big corporations that invest millions of dollars in stocks. To protect their investment, most of these institutions use computers to buy and sell stocks automatically. With that kind of competition, it will be hard to stay ahead of the curve.
However, it is still possible to earn from trading. Just keep in mind that you do not have to buy or sell when the stock hits the top or bottom. It is not important to know when the stocks are going to plateau, it is just enough to know that you have already earned money with the movement. Unless, of course, if you are buying for the long term, where you would be looking at a company’s fundamentals instead of just the stock price.
If you are a day trader, you only need to keep ahead of the curve, and make sure you earn enough each day, with no need to wait until the market turns leaving you with losses.
3. Have a good view
Gone are the days of the cavalier attitude about investing. Nowadays, investing is a serious matter. There are still a lot of instances when a trader can make a killing in a day. However, that does not happen without due diligence.
You need to study the stocks. In which case you have to invest in serious computer hardware. In this case it does not necessarily mean that you should buy an engineering workstation or a gamer’s rig. However, it should at least have enough power for number crunching. It should also have a large monitor, or multiple monitors.
Unlike gaming computers, which use large single monitors, the best monitors for trading actually use multiple monitors. You should invest in good quality monitors for your computer. You can set up your computer to have two or three monitors, with at least 1080p resolution for each. Trading and investing companies make use of multiple monitor setup for their traders.
What would you have to view that you need to have a large monitor on your desktop? Among others, you should have a feed of the stock market. You should also have a news feed for current events as they happen. In addition to the news feed, you should also have a channel for financial news and 24 hour news stations, like Bloomberg and CNN. In addition, you should also have your spreadsheets and charting software open.
The above tips are necessary if you want to compete with big companies who have millions of dollars to invest. You have to have the same information that they have, and as much as possible, the same computer rig that they use.
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