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What is day trading? An Introduction to Trading Strategies for Beginners. | Kempton Express

In this article, we help you to get a better understanding of what day trading entails and outline some of the best day trading strategies for beginners to use online. We also discuss some of the best tips and tricks that every day trader should know about, as well as inform you on the tools…

In this article, we help you to get a better understanding of what day trading entails and outline some of the best day trading strategies for beginners to use online.

We also discuss some of the best tips and tricks that every day trader should know about, as well as inform you on the tools you would need to become a successful day trader.

A Brief Definition of Day Trading in the Foreign Exchange Markets

Day trading is seen as the act of buying and selling foreign currencies in one trading day. Day traders, also known as active traders, consist of those people who have some experience in trading and are typically well-educated on all the topics that concern the Foreign Exchange Markets.

In most cases, day traders choose to register with a regulated forex broker that offers high leverages and short-lived strategies to take advantage of opportunities where they can maximise profits online. Leverages is the amount of money a trader borrows from their broker. This money is used to invest in different markets, such as Forex, Commodities and even the Shares markets.

Beginners who are new to the concept of day trading should spend some time watching tutorials or reading up about the concept before starting to trade online. This will protect them from suffering unexpected losses and becoming discouraged after dedicating so much of their time and effort online.

What Are Day Trading Signals?

Day trading signals act as indicators to traders who are searching for clues on when to buy or sell online. This ultimately leads to a higher profit and success rate when trading.

Advantages and Disadvantages of Day Trading

When you choose to become a day trader, you will have the opportunity to take advantage different price movements in the Foreign Exchange Markets during a period of one trading day. This means that you do not have to hold your trading position open throughout the course of the night and run the risk of big price changes that could influence your profits while you sleep.

Other advantages and disadvantages day traders can look forward to includes;

  • Day traders have the opportunity to take complete control over their success in the Foreign Exchange Markets. As a day trader, you will have to work really hard to devise working strategies that will ensure profitable trades. Take time out to set daily targets for yourself, view analytical charts and other technical analysis tools to keep track of the movements occurring during your trading session.
  • When you choose to become a day trader, you will never have to worry about falling stock prices or struggling markets. This is because day traders take advantage the fluctuating price movements by identifying market patterns and finding indicators of when would be the perfect time to trade.
  • Since day traders only buy and sell during the course of one trading day, they often at time will miss out on any price gaps that occur overnight.

The Current Debate Around Day Trading as a Successful Career

The concept of day trading seems to be one of the most debatable topics in the financial markets. Most often, people claim that day traders are tricked into believing that they can make quick money online. This, however is not the case.

Day traders are well educated about on all that occurs in the Foreign Exchange Markets and just like any other trader, they come up with working plans that ensures profitable trades.

While the thrill of investing in foreign currencies in one day seems to be on the rise, it is important to note that day trading also has its own risk factors.

Risks of Day Trading

Although there are great benefits to trading in one single day, traders still place themselves at a high-risk level. Some of these risks are derived from:

  • lack of trading knowledge

Trading knowledge is one of the most powerful tools a trader can have. This involves understanding the basic principles and concepts of the financial markets.

Some people choose to day trade without having much knowledge about the markets or without knowing what the correct procedures are to follow online.

Without having the correct knowledgebase, a trader unknowingly becomes one of the biggest risks to themselves.

Should you choose to succeed as a day trader, it is important to start by understanding what is expected of you. This can be done by actively participating in forex courses, seminars, webinars and even reading eBooks on trading topics. Once a trader has all the necessary information needed, it would then be best to put that theory into practise by choosing to engage in trades online.

  • The loss of capital

Capital loss is one of the biggest risks a day trader will have to face. Besides from the actual loss you could face while trading, day traders also run at a loss each and every time they purchase new software, pay commission fees or choose to invest in other services that need to be paid for online.

The best option would be to start out on a smaller scale and find opportunities in fewer stocks in the financial markets.

What is the best day trading strategy for beginners?

Scalping

Scalping is one of the most popular day trading strategies used in the Forex market.  This trading strategy takes advantage of small price gaps that are usually created after a trade has been executed.

Traders who make use of this strategy will make profits by buying and selling foreign currencies online. Scalping requires the trader to hold their position open for a short period of time before closing it for a small profit.

Day traders who choose to use the scalping method will be able to actively participate in hundreds of trades in one single day and run a lower risk rate online.

Some of the most popular ways in which day traders look for possible opportunities to maximize profits include;

  • By looking at small price changes in the financial markets.
  • Keeping up to date with the latest market news and trends that will activate any price movement.

Range Trading

Range trading deals with the fact that traders identify overbought or oversold areas in the markets.

All traders who choose to use the range trading strategy would usually buy in the oversold market ranges and sell in the overbought areas online.

To be a successful range trader, you would have to find the support and resistance area of price in the markets.

Just like with any other trading strategy, it is very important to make sure that your broker provides risk management strategies for you to use online.

Some of the most successful methods of risk management for range traders would have to be;

  • Stop-loss order.

A stop-loss order is an instruction to buy or sell once the markets have reached a certain point online. This order is usually given to broker that you use fore trading and holds the purpose of preventing losses during a trade.

Technical indicators can be defined as price and volume calculations that assist traders to identify trends and price movements that occur in the Foreign Exchange Markets.

All traders should look out for leading indicator and lagging indicators.

  • A leading indicator are all those things that influence economic change. Leading indicators for day trading can be found with tools such as an economic calendar. This will assist traders to find out what important events are taking place in the economy and would it have any effect on price movements.
  • Lagging indicators consists of all those signals that only become noticeable when there is big movement happening in the financial markets. These types of changes usually have a great effect on the market in which it occurs since changes the current market trend in a completely different direction.

Fading trading strategy

Fading is a strategy that requires a trader to place their bid against a prevalent trend, in the hopes of gaining a turnaround profit. This method is seen as a high-risk trading strategy because it goes against what is considered to be the norm in the financial markets.

Traders who practice fading would choose to invest when the markets are falling and start selling when prices are on the rise. This risky move is based around the traders hopes that the financial markets will compensate its losses once there is stronger movements online.

Momentum trading strategy

The Momentum trading strategy involves buying and selling assets in the financial markets. A trader who uses the momentum strategy would choose to sell their assets when its price has reached the highest point.

The main idea behind the system is that the market will place enough force on current price movements, thus causing the price to stay in the same direction as before.

Momentum traders really take their time to analyse the strength of the market before deciding to place an opening bid.

Breakout trading strategy

The breakout trading strategy is used when prices tend to move slightly outside of their normal range.

A breakout trader would choose to enter the market when the stock price breaks out lower than its normal price range.

There are two types of breakouts that traders tend to look out for when using the strategy. These include;

  • Support and resistance breakout 

These are the two main indicator levels that are used with the support and resistance breakout strategy.

When a trader identifies the support and resistance areas that are being used repeatedly, eventually a trader can expect a breakout to occur within that area. This is when he/she can use this strategy to take advantage of any opportunities where profits can be made.

  • Swing high and swing low breakouts 

Swing high and swing low indicators can reveal very important information to day traders that can be applied at any given time during their trading session.

Swing low is when price movements hit an ultimate low in the financial markets.  Once price movements have hit their lowest points a trader can expect high swings to occur shortly after.

Some of the benefits of the breakout strategy include the fact that the trader would know almost immediately if their strategy worked or not since trading occurs in real time.  This makes it easier for the trader to identify if he or she executed a profitable trade online

Using pivot points

A pivot point is one of the most common technical analysis tools / indicators that traders used in different time frames.

The pivot point is the average of the high and low-price movements in the Foreign Exchange Markets.

This indicate to the trader what would be the best area of opportunity to trade. There is a special formula which thread is used to calculate pivot points.

Creating Your Own Trading Strategies

During your trading career there would come a time where you would need to create your own working strategies to use online.

To do so, you would need access to market chart and technical analysis tools. These tools are usually supplied by the broker you choose.

Once you have access to the technical analysis tools you will be able to formalize working strategies to use for trading purposes.

Pay close attention to price movements to find potential gaps in the market. It is at those gaps where traders usually find opportunities to make profits online.

Even though it is important to look for potential opportunity is it is equally important to identify areas to use as exit points.

Since the Foreign Exchange Markets are always evolving it is important to keep in mind that not all strategies work forever.

Day traders like to take advantage of the time when their strategy is working for them.  As you fall into the pattern of entering and exiting sessions you find which strategy works best for you.

Factors to Considers When Choosing to Become a Day Trader

If you are interested in becoming a day trader, keep these factors in mind when deciding if this is the best option for you;

  • Do you have the correct tools for trading?

Over the years trading in the foreign exchange market has become so technologically advanced that brokers are even keeping up with the latest software trends to provide their clients with the best user experience.

As a day trader in 2020, you would find that there are hundreds of dedicated software and platforms that are used for trading.

It is important to make sure that you have all the necessary equipment and tools to execute trades as quickly as possible.  This will ultimately lead to profitable and successful trades online.

Day traders need to ensure that they use an electronic communication network (ECN) to keep away from paying high commission fees for each trade executed.

  • Do you have enough capital to start trading daily?

The initial stages of trading can become very costly, especially if you are a day trading beginner that has no experience in the financial markets.

As a day trader, you will be working with multiple markets and products in one day. This could range between Forex, Indices, Precious Metals and even Stocks. For this reason, it is vital that day traders keep account of the funds they would have to invest before reaching a state of profit.

If you are a beginner trader, try to look for brokers who offer welcome bonuses to all their new clients. This will work out to your benefit since there is no minimum deposit involved. Diversit-e Smart Trade College has partnered with a FSCA regulated Broker that offers many different bonuses. Clients funds are also kept in a segregated account, meaning operational costs are kept separate from Clients’ funds.

No deposit bonuses require the broker to pay their new clients and amount of funds that should only be used for trading purposes. These funds are not allowed to be withdrawn from the trading account, but the profits incurred can be taken out by the trader after they have successfully completed a trade.

  • How much time are you willing to invest?

Day traders usually spend countless hours trying to analyse the markets for the best time to invest. This requires a lot of patients and concentration from the trader should they want to find those short-term profit margins.

It is common to find that day traders spend time to come up with working strategies before they actually test it out in the Foreign Exchange Markets.

Before deciding to become a fully-fledged day trader, make sure that you understand that it will take a great amount of time before you see large profits online.

How to Choose the Best Broker for Day Trading

It is important to keep the following factors in mind when choosing a broker for day trading;

  • Execution speed

As a day trader it is important that the broker you choose offers a high execution speed. This is because day traders usually perform large amount of trades in one single day.

  • Trading platform

Make sure that the trading platform you choose caters for all your needs.  Be sure to take time out to explore all the tools that the broker offers.

Some of the tools that a day trader should look out for include stop-loss orders, negative balance protection schemes and even analytical charts.

  • The level of customer care and support you will receive as a trader.

It is important to make sure you will receive the support you need. The level of customer cares a broker provides often makes or breaks the success of their traders online. At the time of publishing this article has Diversit-e Smart Trade College been proudly reviewed as the “Best Education and Support” company in our industry for almost 6-consecutive months.

Diversit-e Smart Trade College and our partner-broker supply our Clients with unlimited support in the form of live chat functions, web based and even personalised mentoring and support.

  • Regulations and safety of funds.

Make sure that the broker you choose is a in fact regulated.  A regulated broker is a company that complies with certain rules that control and protect the Foreign Exchange Markets.

In terms of safety of funds, most brokerage companies keep their clients fund safely in a segregated account. The segregated account guarantees traders that the company will not use their funds should it suffer any financial loss.

  • The markets and products the broker offers

Day traders tend to tap into different markets during their trading sessions. It is important that the broker you choose offers a wide range of products online. Some of the most common market products broker offer include Forex, Commodities, CFD’s and Cryptocurrencies.

If you choose a broker that provides very limited market options, this could harm your chances at becoming a successful day trader.

Although the options you would be presented with may seem endless, it could be best for you to choose to invest in one market at a time. This will allow you to pay full attention to the activity taking place within that specific market and easily find opportunities to make profits online. Take time to research what would be the best market for you in terms of your lifestyle and goals you would want to achieve in the Foreign Exchange Markets.

Even though there is a lot of speculation around day trading and if it is in fact a profitable career, those traders who choose this path can look forward to benefiting from shorter trades and small profits online.

When you are deciding on whether to become a day trader keep in mind that day traders play an important role of keeping the financial markets liquid.

Allow yourself the freedom and invest quality time to do proper research to determine what day trading in forex and is, what it requires and if it is for you. Should you be interested to become a day trader, first take the initiative to find the best broker for you who will allow you to open a demo account online. The demo account option will allow you to practise trading in real time without having to invest any of your own personal funds into your account.

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Demo Trading

Use Demo, Do NOT Over Abuse It

Use Demo, Do NOT Over Abuse It

All  psychologists say that every person needs to know itself and to know his or her own level of patience and anxiety levels, and that practice is a good way to do. But do not abuse it. I think it works in the same way with the Forex demo accounts. Too much demo really sucks and will never prepare you for the real trading. Trading demo too much time won’t make you a better trader but a better loser. Once you know how to use the tools on your trading platform and you have the basis of the trading, close the demo and get on real money. You don’t need six months for that. Think it in this way: if an average human life is 70 years, no one needs more than one single year to learn how to walk. Here are a few tips for you:

  • Even if you are on real money now, you can still use the demo to test a new strategy (strongly recommend to be your own strategy and not someone else’s) or you can use the demo to test how a new instrument acts. For example when Bitcoin was launched, the demo account was a better choice than the real money account, to see how BTCUSD is trading.
  • If you like the automatic trading, you can use the demo to test the EA you just bought or maybe build one yourself.
  • When you start to trade on demo, at least ask your broker to make the demo as big as your future real money account. Is really useful to trade 50000$ on demo while you will only deposit 1000$ when opening the real account.
  • Even if you trade on a demo account, – meaning simulated market conditions – I suggest making realistic assumptions. Use a margin of one up to five pips when you place your entry, stop losses or take profit orders as in the real market conditions quite often happens to see them executed at a different value than what your set ups – especially for entry orders.
  • The simulated trading environment does provide a trader with the opportunity to get used to the software he will be using or with his broker’s trading conditions. Use the demo account only for this purpose and do not try to build a reputation by linking the account on websites as www.myfxbook.com or www.fxstats.com because no one cares how good you are on demo.
  • Least but not the last, try to avoid the demo accounts with unlimited use. If you can’t stop to trade on demo your broker will, by denying you the access to the demo and inviting you to open the real money account.

the Demo accounts are there for you to get started and actually understand if the broker you have chosen is the right one for you. but it is also like when you play a game on your mobile and you play against someone who bought his levels , no matter how good you are his tools will kick your ass every time. forex works much in the same way . in the end you can simulate only so much before it becomes redundant.

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Demo Trading

The Importance of Demo Trading and Your Demo Account

The Importance of Demo Trading and Your Demo Account

I see that some traders believe that demo trading is not a good practice because you know that you are trading with the demo money, and so you don’t trade with discipline. They believe demo trading causes the novice traders not to learn to trade with discipline, and this will be ended to failure finally. When you know you are not trading with your real money, then you don’t care to lose, and so you can make all the possible mistakes, like taking positions with any trade setup (either weak or strong) you see, taking positions while there is no trade setup, over-trading and… . It will be a disaster if these bad actions become a habit in you.

This is true only when you are not a serious learner and you are practicing Forex just to see what it is. So you open a demo account and you take some positions to see how it works. You don’t care if you lose.

However, when you are serious to become a professional and full time-trader, and when you want to make a living through trading, then you should behave completely different.

Before you open a demo account and start demo trading, first you should learn everything you need to know. I have explained this in details here: Do You Think You Are on The Right Track to Become a Profitable Trader?

First complete your knowledge and then start demo trading. Spend enough time to follow the videos and articles I have listed in the above article. If you start demo trading while you are not ready yet, you will only make yourself confused, frustrated and disappointed. Forex makes money. Do not let your mistakes make you think that you can not make money through Forex.

Now let’s say you have learned everything you need to learn, and now you are ready to gain experience through demo-trading. This is a very important stage that if you don’t pass properly, you will not become successful with live trading.

Aren’t you here to make money through forex trading finally? If the answer is yes, then you should pass all the stages very carefully and patiently, otherwise you will not get any good result. I can not emphasize on this more. It is very important.

Make sure to read the below articles carefully:

  1. How To Become a Successful Forex Trader
  2. Are You Still Looking for the Forex Holy Grail?
  3. Do You Think You Are on The Right Track to Become a Profitable Trader?

There are a few things about demo-trading I have to emphasize on:

1. Take the demo trading as serious as possible. Forget that it is the demo money and nothing happens if you lose. You can blow up your live account as easy as you blow up a demo account. So, when you open a demo account, forget that it is a “demo” account. Treat it as a live account and your real money. Do you like to lose money with your live account so easily? If not, then do not lose with your demo account so easily too.

The discipline you need for Forex trading is something that you have to “build” in yourself. You have to “build” it on your own. And demo-trading is the foundation of your “Discipline Building”. If you trade carelessly with your demo account, you will do the same with your live account too. If you take positions with your demo account while there is no strong trade setup, you will do the same with your live account too. If you over-trade with your demo account, it becomes a habit, and you will do the same with your live account too. If you…

Conversely, if you forget that you are “demo” trading, and you take your demo account as serious as your live account and real money, and you wait for the strong setups only, and you do not over-trade and you don’t take too much risk, and you set the stop loss and target properly, and you care about the losses as you care about losing with your real money, then the discipline you need to have to make money through Forex trading, will be built and matured in you, and you will be successful with your live account definitely.

2. Make sure to keep on demo trading and not to open a live account, as long as you have not been able to repeat your success with your demo account.

Does it make sense to open a live account and trade with the real money while you have not become able to make money with the demo account yet? If it doesn’t make sense, why are you trading with a live account then? You think live trading is different? It is not. When you lose with the demo account, you lose with the live account too. If you are not knowledgeable, experienced and disciplined enough to make profit with the demo account, you will not make profit with the live account too.

You will always have time to open a live account and start live trading. Don’t do it when you are not ready yet.

3. Your demo account size has to be the same as your live account size. I mean if you are supposed to open a $1000 live account in future, then practice with a $1000 demo account too, and do not open a $100,000 demo account for example. This helps you behave with your demo account exactly as your live account. This helps you take your demo account serious.

Keep in your mind that your demo account has to be treated exactly as your live account. Although you open a demo account for free, but it is not “free” in reality. You are spending your time on it. You are building your experience and discipline with it. So not only it is not free, but it is too expensive and valuable. It is the “foundation” of your business.

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Demo Trading

NinjaTrader Review 2020: Pros, Cons, Fees & More • Benzinga

If you’re on the hunt for the best online brokerage, Ninja Trader is a great fit for both new investors and seasoned traders. Some of the key features in NinjaTrader’s futures brokerage service include:

If you’re on the hunt for the best online brokerage, Ninja Trader is a great fit for both new investors and seasoned traders. Some of the key features in NinjaTrader’s futures brokerage service include:

  • Commissions as low as $.09 per Micro contract
  • Low $400 account minimum
  • Low day trading margins of $500 per contract for E-mini S&P 500 (ES), Nasdaq (NQ) and Dow Jones Industrial Average (YM) stock index futures contracts
  • $1,000 margins for Gold (GC) and Crude Oil (CL) futures contracts
  • Free version of NinjaTrader platform included with all brokerage accounts
  • Three platform license levels with varying feature sets and commission rates

In addition, the broker offers competitive spreads and a high-speed execution service for forex currency pairs.  

Who’s NinjaTrader For?

Futures Traders

NinjaTrader’s brokerage services cater directly to futures traders. It’s the ideal destination for those both active and new, with unlimited free use for advanced charting, market analysis, and simulation trading.

Advanced Traders

NinjaTrader’s state-of-the-art trading platform has a variety of features available across three license levels that allow traders to select the best fit for their trading approach. There are two upgrade feature sets available, Trader + and Order Flow +.

While advanced charting, market analysis, and simulated trading are included free for all users, licensing Trader + or Order Flow + gives you access to premium tools such as an enhanced SuperDOM, an advanced alerting system, semi-automated order execution, volumetric bars, and other sophisticated charting systems.

Active Traders

With commission among the lowest in the industry, traders can keep their costs low on a per contract basis. NinjaTrader’s low margins are also a great fit for active traders. With numerous technical analysis tools available, the trading platform can help users target opportunities and manage execution in volatile markets.

NinjaTrader has their flagship advanced trading platform for Windows-based desktop computers. Other third-party platforms are supported and available by request. If you are a Mac user, you can run the software using a multi-boot utility like Apple Boot Camp.

Source: https://ninjatrader.com/

NinjaTrader features a wide range of technical analysis functions that can be useful for those starting out with demo trading — especially if you want to learn how to trade futures.

The broker uses CQG (Continuum) for order routing by default but also supports order execution through Rithmic. Kinetick is also available as a free end of day market data source for stock, futures and forex data optimized exclusively for use with NinjaTrader’s platform.

If you’re interested in trying out the NinjaTrader platform using futures data, you can register to get a free two-week trial.

A free version of the NinjaTrader platform is included with all funded brokerage accounts and has all the core features needed for live trading, with access to charts, market analysis, and simulated trading.

If you want to access some of its more advanced capabilities, you can either lease the software starting at a quarterly basis or purchase a Lifetime license, which includes free upgrades for life.

The advanced tool sets are where NinjaTrader really shines. For example, sophisticated order types known as automated trade management (ATM) strategies are included in the Trader + feature suite. These consist of a set of specific rules you create to manage a group of stop-loss and profit target orders to operate on all or part of an open position.

NinjaTrader’s third-party developer community, known as NinjaTrader Ecosystem, features thousands of third-party apps and add-ons you can use with its trading platform. From their website, you can use the keyword search and filters to scan hundreds of custom tools and trading indicators built to work with NinjaTrader.

If you have programming skills, you can build compatible software within its advanced C# based development environment.

The NinjaTrader platform provides a high-performance backtesting engine which allows users to test and verify futures trading strategies using historical data. A wide range of useful educational materials are available if you’re unfamiliar with its platform and wat to enhance your skills.

These include daily training webinars designed to educate new users on the powerful tools available, hundreds of on-demand training videos, help guides, and an informative YouTube channel.

[youtube https://www.youtube.com/watch?v=bg4ocBoYrjM]

NinjaTrader’s Commission and Fees

Commission and margin requirements are among the lowest in the industry. A $1,000 minimum initial deposit is required to fund a new account and commissions go as low as $.09 per Micro contract with a Lifetime license. Day trading margins of $500 for ES, NQ and YM contracts, and $400 for GC and CL contracts are also very low.

When it comes to platform fees, the broker’s advanced platform and live data are available free of charge for use in a demo account. For live trading, you can use their free platform with all the basic essentials or choose a paid license level for more advanced features and lower commissions.

If you lease or buy a Lifetime license for the trading platform software, you also gain access to a suite of premium features that include its advanced trading management (ATM) strategic order handling. Traders who purchase a lifetime license also get the Order Flow feature set which comes with free platform upgrades for life.

NinjaTrader’s Security

NinjaTrader is well-regulated in the United States by the National Futures Association and the Commodity Futures Trading Commission (CFTC).

NinjaTrader’s Customer Support

NinjaTrader’s online support team excels in prompt replies with inquiries addressed within 15 minutes during market hours. An active user community interacts directly with the NinjaTrader support team in their User Forum. They also host daily live training webinars, have hundreds of on-demand training videos, and more.

NinjaTrader can be reached by email, phone, and an online support form for customer service. For critical trade issues, NinjaTrader provides direct phone support for brokerage clients. International traders are also directly supported with dedicated Spanish, Russian and German brokerage service teams. 

NinjaTrader’s Tradable Asset Classes

NinjaTrader brokerage offers a basic range of asset classes with a focus on futures trading on the CME, CBOT, NYBOT and Eurex exchanges. You can trade the following asset classes via NinjaTrader:

  • Futures 
  • Forex 
  • CFDs
  • Stocks*

*The platform can also be used through other supporting brokers such as TD Ameritrade or Interactive Brokers to trade stocks.

NinjaTrader’s Ease of Use

After downloading the NinjaTrader platform, it’s best to spend some time on the forum and watch the tutorial videos provided. It may take some time to set-up your ideal dashboard.

While NinjaTrader’s platform is exceptionally customizable and offers numerous advanced features, it may not be considered easy to use when you first download the platform.

Final Thoughts

NinjaTrader is one of the top brokers for futures and forex trading. The unlimited use of its free platform is a great way to get acclimated to NinjaTrader before deciding to trade live.

The free platform is sufficient for new traders with more advanced tools available as need such as semi-automated execution. NinjaTrader’s low commissions and fees, free tools, and an active community forum will work to any trader’s advantage.

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