One of the best ways to improve your skills as a trader is to focus on a niche, whether it’s a particular type of trading or only buying and selling in a specific industry. Once you have a specialty in a certain area, you can then focus your skillset. For example, if you prefer day trading, you can start analyzing charts and graphs for trends that indicate when you might generate some revenue by buying and selling shares within a single trading cycle.
Take candlestick charts, for instance. These are more detailed than line graphs, showing open and close prices as well as the overall high and low prices of a certain share. This information is fantastic for day trading and is also useful in many other market strategies. In addition to adjusting how you analyze data to fit your niche, you also need to think about mitigating risk for the type of day trading you want to do.
Take people who want to purchase stock and plan to hold onto it for decades. These individuals want companies that have demonstrated steady growth, among other factors. But these things may not be important if you’re a day trader. To lower your risk in this area, it’s more important to do things like creating a daily stopping point and enacting stop-loss orders. These things aren’t as commonly used in other types of trading, but it also depends greatly on your personal strategy and habits. More details about limiting losses in day trading are outlined in the infographic below.