Online stock trading for beginners is a popular way to earn profits from the stock market. When it comes to trading, one of the most popular strategies includes day trading, which involves buying and selling financial instruments within a single trading day.
This means closing out positions at the end of each day and starting anew the next. Day traders buy and sell multiple assets within the same day, or even multiple times within a day, to take advantage of small price movements. Day trading is a popular trading style in the UK as the country is one of the most influential trading and financial centres across the globe.
What is day trading?
Even though trading is not rocket science, you should have a solid working knowledge of the trading world in general before you start day trading in the UK.
Experts define day trading, in particular, as any trading activity in a single trading day. In other words, day trading allows traders to execute different trades during the day but requires them to close out their positions before the market closes.
The main aim of day trading is to make a profit by capitalising on small price movements across different assets throughout a single trading day. Because of its active nature, day trading requires quick decisions and the latest data.
What assets can day traders buy and sell?
Trading is one of the oldest human activities, and everyday online stock trading for beginners attracts more and more people from all over the world.
Day trading, in particular, is an exciting trading practice that allows traders to buy and sell different assets within a single day. Because of this, day trading provides a great opportunity to avoid the risks of overnight market changes and costs.
Take forex trading, for example. The forex market is defined as one of the most popular and liquid markets in the world. With a variety of trading currency pairs, there are numerous short-term opportunities for day traders to explore.
As another example, cryptocurrency trading provides a great option for day traders as it is marked by high volatility and growth.
Trading stocks, indices, futures, and commodities intraday is also a particularly attractive option in the case of online stock trading for beginners, as it reduces the risk of gapping in trading or the potential for price changes due to news breaking overnight.
The difference between day trading and swing trading
When it comes to trading in the UK, there are many trading styles to choose from. For example, some active traders may choose day trading, while others may prefer swing trading.
Though both styles are highly popular and aim to time the market in the short-term, there are some differences. For example, day traders do not hold positions overnight and prefer liquid assets with high volume. Essentially, day traders value volatility and choose assets that are sensitive to news and speculation whereas swing traders can hold positions for days or even weeks.
Here we should note that scalping is also a popular trading method in the UK. Scalping is an extreme form of short-term trading marked by small price changes and quick executions. For example, many scalpers may enjoy making a few small gains on a single move within minutes.
Ultimately, it is only you that can decide which online stock trading for beginners methods to explore.
What do you need to know about day trading in the UK?
Day trading offers numerous opportunities as the UK is one of the world’s leading financial centres.
Forex trading, in particular, is increasing in popularity across the UK and has become the backbone of trading worldwide. There are around 405,160 online traders in the UK, and these numbers are rising.
However, we shouldn’t forget there are different regulations for taxation depending on how and what you trade. Note that trading activities in the UK can be usually classified into three categories: speculative (free from tax), self-employed (liable to pay business tax), and private investor (under the capital gains tax regulation).
For example, you don’t have to pay tax if you decide to trade forex in the UK as spread betting.
How to start day trading in the UK?
Once you’ve understood the basics of day trading and the way it’s regulated in the UK, it’s time to get started. Here are some steps that can guide you in online stock trading for beginners.
Trading education:
One of the first steps, before you invest in day trading, is to invest in proper trading education. You can explore different resources to understand the complexities of the world of finance ranging from online courses to coaching sessions. Learn about technical and fundamental analysis, sign up for different courses and webinars, and do not hesitate to join social groups with like-minded people. The good news is that in today’s tech-driven world, traders can find a multitude of online resources for free.
Trade reliable equipment:
Trading has evolved significantly over the centuries, with online stock trading for beginners as well as day trading offering a range of opportunities. Though you don’t need a fancy computer to start day trading in the UK, you need a reliable one and fast connectivity in order to track constant price changes and news throughout the day. You track different indicators by using two monitors. Create an enjoyable work environment as you need to spend a lot of time reading indicators on the screen. You cannot afford to ruin your strategy even if you get bored staring at your screen.
Find a reliable platform and a reputable broker:
It’s not a secret that online stock trading for beginners requires a reliable platform to start day trading in the UK. Make sure you find a reliable platform which features calendar of news events, social trading tools, and any other support you might need. Some platforms may even offer minute by minute charts which can boost your trading capacity. In terms of trading brokers, always choose a regulated broker to help you get started. Check what capital is required to get started in day trading as well. The great news is that there are a number of different accounts to choose from and one can start trading with as little as £100.
