Daytrading recommendations for 2020 - useful tips for retailers

Day trading recommendations 2020: What is important for day trading? Tips & tricks for retailers in the guide Use knowledge now and increase opportunities

Again and again we are asked for day trading recommendations from this website. More and more private investors trust themselves to invest speculatively in the hope of achieving a high return. We have therefore collected our best day trading tips. In addition, we would also like to inform you about how you can find a day trading broker where you can trade successfully because the basic conditions are right.

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Day trading recommendations for Successful trading

Beginners of day trading often look for opportunities to trade successfully right from the start and without losses. However, this is almost impossible. We have some important tips for beginners:

    1. Risk management as the most important factor

One of the most common day trading recommendations currently is to keep an eye on the risk. Investors can only trade successfully if they can calculate their losses and stop at the right moment. At the very beginning, many traders make the mistake of taking profits too early and making losses run too long. In this way, however, it is almost never possible to act successfully. Accordingly, proper risk and money management is one of the biggest challenges in trading. Investors should deal with this extensively and use it in the demo account before they actually risk their money.

    1. Have your own experience

One of the most important day trading recommendations is that investors should have their own experience and not rely too heavily on the opinions of others. This applies above all to free information on the Internet, but even more so to strategies that are subject to a charge. Usually the tips and predictions cannot deliver what they promise. In addition, traders should not forget that the success rate among traders is quite low and it is therefore likely that tipsters will make their money with their day trading recommendations rather than with their analyzes and forecasts.

    1. Learn, learn, learn

A good trader is constantly training himself and always questions his trades critically. A trading diary makes the analysis much easier. In addition, traders should exchange ideas with like-minded people and also not shy away from specialist literature. This is the only way they can perfect their tactics and be permanently successful.

    1. Passive position management

Many traders tend to change stops once a trade turns out differently. Often this is not to your advantage. A good alternative is to write down the changes and later compare them with the actual trade. In this way, the potential for improvement can be discovered and used systematically if the investor would act more profitably in these cases.

    1. Find a good broker

A professional and reputable broker is the most important step to act successfully. If the basic conditions are not correct, successful trading is impossible. We therefore put together the most important features that brokers who want to be considered day trading recommendations must meet.

Above all, beginners should keep an eye on the risk and should not change any stops once they have been set. They also have to be willing to learn and yet not listen to the opinions of others too much. It is also important to choose a professional broker.

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Daytrading recommendations for 2020 - useful tips for retailers

Most important factor in the day trading recommendation: absolute seriousness

Day trading enables big profits. Many of the financial products offered under this framework are also not as tightly regulated as the retail market is. In some cases brokers in Germany do not even offer products for day traders because they are not licensed by BaFin. As a result, a market has also developed abroad that offers day trading for customers from Germany.

However, investors must note that not all brokers are serious and enable high-quality trading. Especially if there is no license, all alarm bells should ring for interested parties. Such providers are not subject to any regulation and are not checked for many important factors. In Germany, a license from BaFin means, for example, that the broker:

  • is on a solid financial basis.
  • The managing directors have not been responsible for anything
  • Von experienced and competent staff is led
  • He only offers products that are allowed on the German market
  • The broker fair advertises

The BaFin are also quite limited set. For example, it itself investigates against brokers to a very limited extent and passes on information to other authorities. Nevertheless, a BaFin license is a gold standard for customers from Germany. The British FCA is also considered to be relatively strict and a contact point for reputable providers, but it is no longer clear due to Brexit under what circumstances German traders can trade there in future.

Cyprus is a broker with many day trading offers one of the first points of contact. For a long time, the local CySEC was considered too lax and was a thorn in the side of many financial regulators from the old EU countries. However, it is increasingly harder to deal with and thus presents dubious providers with problems. With licenses in new EU countries, investors should always ask why the broker is licensed there. Often it is not the fairest providers that identify in Cyprus and Co. Those who want to be perceived as serious by professional traders as brokers usually choose financially strong countries with strict regulations.

Interested parties should be particularly careful when the broker does not present a team behind them, but only through one unknown Limited is represented. Often there is no professional provider behind the offer. A day trading recommendation is accordingly difficult to make with these brokers.

The most important characteristic of a good day trading broker is its seriousness. Traders should check all day trading recommendations for their license and the team behind the broker before registering.

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Basic decision: market maker, STP or ECN broker

If you are looking for a day trading recommendation that fits your requirements well, you also have to deal with the different business models. There are important differences here that can mean huge differences for the trader. Another word for the two groups is dealing desk broker and non dealing desk broker.

Market makers, also known as retail brokers, are always the trading partner for the trader. So you set the prices at which the trader can buy and sell. Accordingly, the fees are also calculated using spreads. In other business models, some of these are also collected, but they result primarily from the liquidity of the underlying.

They usually mediate the individual trades with each other and hedge against strong imbalances on the free market. This also means that there can be a conflict between traders and brokers. In these cases, the broker wins when the investor loses money. Market makers are usually aimed primarily at beginners. They have low entry sums and thus allow trading even if five-digit sums are not regularly traded.

Another concept represented by ECN and STP brokers, which are more similar. Both convey the trades of the customers and do not act as trading partners. ECN brokers mediate the trades to a liquidity network, STP brokers to liquidity pools. They charge their fees in the form of commissions and do not enter into trades as trading partners. Accordingly, they have no financial interest in whether a trader trades successfully or at a loss. On the contrary, it is even an advantage for them if a trader is successful, because then they tend to continue trading and do not change providers, which means more commissions for them. However, ECN and STP brokers have the disadvantage that traders often have to invest significantly more money here. This is not only due to the high minimum deposit, but also affects every trade afterwards. Excessively small trading volumes are often not negotiable in the ECN, so it makes little sense to use this type of trading with little capital.

Investors should first consider the conditions under which they would like to trade and how much Capital bring them along. An ECN broker is usually the first and best choice for ambitious traders, but not everyone can afford such an offer.

Market makers are more aimed at beginners who offer ECN brokers best conditions and are therefore mentioned more frequently in day trading recommendations. However, they also require higher minimum deposits.

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Daytrading recommendations for 2020 - useful tips for retailers

Crucial costs for many traders

Many day trading recommendations of certain providers support mainly on the fee structure. As in many other features, market makers can only be compared with their peers and ECN brokers with each other. Day traders must pay particular attention to the commission and / or the spreads, while rollover fees are of secondary importance to them.

The fees are not necessarily comparable because an ECN broker usually uses the spreads of the Reproduces the internal banking market as accurately as possible, but the Commission also charges. A retail broker mainly uses spreads to settle and waives the commission. In a day trading broker comparison, investors must also pay attention to the exact value that is given. There can be a huge difference in everyday trading between the minimum and average spread.

There may also be additional costs. Traders should keep an eye on inactivity costs, real-time rates, withdrawals, deposits and other services so that the broker is not surprisingly expensive. Many Forex and CFD brokers also reward their customers when they trade a lot or deposit a lot of capital. Usually, traders can get a discount on commissions and trade at a lower price.

No matter whether commission or spread: Favorable fees improve returns.

Conditions must match the trader

In addition to the fees, investors must also note the different conditions of the brokers. They differ significantly in some cases and do not suit all investors. It is often particularly clear here which target group a broker has. That is why it is often not possible to give clear day trading recommendations for a particular provider.

The most important conditions include:

  • What types of trading are allowed?
  • Minimum deposit and minimum deposit
  • Maximum and minimum leverage
  • Margin amount
  • Margin call / automatic closing of positions
  • No obligation to make additional payments
  • Requotes Yes / No
  • Positive slippage possible or not

All of these features are important factors that can decide whether a broker is suitable or completely unusable for an investor. The minimum deposit often decides whether the capital of a customer is sufficient to become active with the broker. Some brokers prohibit different strategies. These include:

  • Scalping
  • News-Trading
  • Hedging
  • Automated Trading

Usually it is tend to be retail brokers, while ECN and STP brokers usually give their customers free rein. Investors who want to focus on one type of trading strategy therefore almost inevitably have to do without market makers.

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For beginners, one of the most important day trading recommendations is only limited to that maximum height of the lever. Even if the profit can be increased significantly, the risk increases equally. Professionals usually trade with a maximum leverage of 1:20. Beginners shouldn't make the mistake and take the risk lightly. There are also current efforts within the EU to limit the maximum leverage that investors can use without changing the default setting to 1:50. Accordingly, even beginners can assume that higher leverage should only be considered for traders who really know what they are doing and are already in doubt of losing everything. The maximum amount should therefore not play a major role.

A waiver of the obligation to make additional contributions is now required by many EU countries if a broker wants to be licensed by the respective financial supervisory authority. The margin call, together with the automatic closing of the positions, actually protects the investor and the broker from the fact that the customer's account can become negative. However, in absolute exceptional cases it is no longer possible to close orders in good time because there is no liquidity on the market.

A very high loss, which goes beyond the original deposit due to the leverage, can result. If the broker waives the obligation to make additional payments, he does not ask the trader to make up for the negative account balance. Accordingly, a broker with no obligation to make additional payments is a clear day trading recommendation for all beginners who cannot yet assess the risk.

Investors should ensure that the conditions of the broker meet their possibilities.

Daytrading recommendations for 2020 - useful tips for retailers

Speed ​​and reliability of the trading platform crucial for success

For many traders, the responsiveness and latency of the trading platforms is essential. Should technical delays result in investors having to close their positions at significantly different prices, this can have extremely negative effects on success and returns. It is particularly annoying when the trading platform even fails completely and traders have to miss out on attractive profit opportunities or cannot close their positions in time. This can happen with smaller or poorly prepared providers, especially with important news.

Especially with the trading software, chaff is often separated from wheat. Anyone who has traded with a professional provider will appreciate the speed and reliability.

The day trading recommendations usually include brokers whose trading platform is professional and versatile. Only when traders have all the tools and tools they need to trade can they trade successfully. Usability is also crucial for many beginners. Day trading brokers must not make the trading platform too complicated and often have to take a tightrope walk in order to be able to offer trading software that satisfies everyone.

A broker's trading software is largely responsible for the fact that traders can trade successfully.

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Large selection important for many day traders

One of the most important factors a good day trading broker is the choice. Many investors only trade with a handful of underlyings anyway, but this is always a sign of great professionalism.

In addition, traders with a PC-based strategy can find interesting underlyings faster in this way. And new traders can also benefit from it.

That is why selection is one of the most important factors for day trading brokers. Many brokers now offer both Forex and CFDs trading, allowing hundreds of underlyings to trade.

Day trading brokers with a large selection often offer more professional trading environments.

Daytrading recommendations for 2020 - useful tips for retailers

Day trading recommendation: Use demo account

No matter whether traders are looking for a day trading broker or want to check their own strategy. It is often worth opening a demo account with a broker that offers this service free of charge. In this way, customers can take a closer look at the offer and decide for or against the provider.

However, the offer is much more important for beginners who do not yet know whether their strategy can work in the long term or even developed none at all. A demo account enables risk-free trading and as real conditions as possible. Although these are only reproduced, they often come very close to the actual circumstances. In this way, beginners can find out whether they generally enjoy day trading, where they may still have gaps in knowledge, or whether they already see opportunities for improvement.

The psychological component that should never be neglected in day trading also plays a role a somewhat more important role here. However, one of the most important day trading recommendations is certainly that the use of real money has a much stronger influence on the psyche and, accordingly, it cannot or should not be concluded from the demo account that there is an account with real money. The challenge then increases again significantly.

A demo account is one of the most common day trading recommendations because advanced and beginners alike can benefit from risk-free trades.

Conclusion: Day trading recommendations

Day trading can now also be extremely profitable for private traders. However, beginners have to consider a few things so as not to endanger their capital unnecessarily. This also includes choosing a professional and reputable broker who offers a good trading environment and thus does not distort the success of the trader.

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