The attraction of day trading is hard to deny. Earning a handsome living from the comfort of the home apparently is more appealing than the majority of 9-5 gigs. However, inexperience can wreck portfolios. Hence, day trading takes a good deal of preparation before winning becomes a habit. 

Day trading: definition

Day trading is the buying and selling of tradable assets in a short time frame, generally a day. The objective is to earn a small profit on each trade and subsequently compound those gains over time. 

With the appearance of online brokers like PrimeFin and affordable trades, day trading became a feasible way for retail investors to transform a few days’ worth of swift wins into a considerable bankroll. 

In practice, nevertheless, retail investors find it challenging to make money thru day trading. The minuscule number of traders who consistently make money are dully committed. They do not treat day trading as a hobby or a part-time job demanding modest levels of effort. 

Does this sound a bit too hefty?  There’s still an option where you’d not be blamed for being half-committed. Engage in the long term, buy and hold investing in a well-diversified portfolio with ETDs and low-cost investment funds. Make periodic investments into the account. There is any number of day trading strategies that could make your trades profitable. 

The abovementioned is not as instructive or even thrilling as day trading. However, it is definitely less risky. 

Starting day trading -fast! Or How do I start day trading as a beginner?

With day trading, volatility is the name of the game. Day traders depend heavily on stock or market fluctuations to be profitable. They like tradable assets that bounce around through the course of the trading day. Such volatility may have varied causes: a food or bad earnings report, positive or negative report, or simply market sentiment. They also prefer highly liquid stocks, ones that permit them to move in and out of a position without the stock price being much packed. 

Day traders could buy stock in case it is moving higher or short sell it if it is moving lower. They try to profit on a stock’s fall. They can trade the same stock several times in the day. It's the price movement they are looking for. 

Day trading: margin buying or How much do you need to start today's trade?

You can start day trading with Prime Fin with an initial deposit of GBP 250.

To increase profits, a lot of traders use borrowed money to make trades. This is called ‘buying on margin’. With a margin account, you may use the securities you already own as leverage to borrow up to 50% of the security’s value. Leveraging like this may augment profits to a greater degree than achievable thru your own cash . However, loss amplification makes you realize that leveraging is a double-edged sword. You stand to profit or suffer loss in equal measures. You just have to develop the knack of using leverage wisely. 

If you wished to purchase stock worth GBP 20000, you could buy GBP 10000 worth of shares, and borrow the other GBP 10000 from PrimeFin. In case you bought the stock at GBP 10 per share and it lat appreciated to GBP 12 per share- you sold at that price - you would have GBP 24000. Post paying back the GBP 10000 loan to PrimeFin you are left with GBP 14000. That’s a 40% increase. Without leverage, your return would have amounted to just 20%. 

However, it could happen that the stock price fell by 20%. The same rules hold good. In case you sold at GBP 8 per share, you would have a mere GBP 16000. Post repaying the GBP 10000, you’d have GBP 6000 remaining. That's a 40% loss.

Rider: there’s an interest on the margin loan. 

Conclusion

Ask yourself honestly; are you cut out for day trading? That calling demands sharp concentration and is not for those tending to nervousness. Also, it would be wrong to risk more than you can afford to lose. Are you sure about what your risk tolerance is? 

Open a demo account at PrimeFin. Make hypothetical trades monitor outcomes. Then get into live trading-fast!