Our top 7 tips for new investors are:

1. Don’t invest money you cannot afford to lose
2. Define what type of investor you are
3. Choose an investment strategy based on your type
4. Choose the right broker for you
5. Educate yourself and understand the investment environment
6. Don’t be afraid to start small
7. Adapt

Day trading aims to open and close all positions within a day. No positions are to be left open overnight. Daily trading sessions are full of opportunities to enter/exit, and day traders must be well equipped to handle what comes with it.

Day traders use technical analysis, which they consider more important than the fundamentals of the economy (or an individual company), because in their view “markets discount everything”. This means that all fundamentals are already priced in the fluctuations, so the technical indicators can give them all the information they need.

Volatility occurs when there is uncertainty in the markets. Most important factors that trigger volatility are economic, political/geopolitical events, fear, greed and any changes in investor’s expectations.

Volatility is mostly measured by standard deviation. This is the standard range prices can deviate from their average price within a year. The higher the standard deviation, the riskier the asset.

Volatility can be measured and tracked by the price beta, the implied volatility and the VIX Index.

The study of important financial and economic indicators, both at a company as well as overall economy level. These indicators and financial statements are released to show the health of organizations and economies from various angles.

The goal of fundamental analysis is to find a security’s intrinsic value. This value is the “real value” of the security, that is expected to make a profit from its sale in the future.

Technical analysis is a set of mathematical formulas, that are used to identify trends, momentum, volatility and volume at any given time period.

These mathematical formulas are called Technical Indicators. They are applied to charts (graphical representations of prices), that show the price history of any asset, in periods of a few minutes to many years in the past.

Charts are a graphical representation of a security’s price. Prices fluctuate with every second and charts record these changes and present them on a graph, for a more visual look.

Technical analysts use these historical prices and the periods to apply technical indicators, spot trends, recognize patterns, and find entry/exit points based on their trading strategy.

Demo accounts are replicas of the exact trading platform (software) used to trade the markets. These replicas are loaded with virtual money (just numbers in the balance with no real effect), and traders can use these to test their strategies, the system, the broker’s execution, or if trading really is something they can pursue.

Its important for every trader to use demo accounts, no matter the experience level to test their broker. Think of them like a warmup before a big task (like running a large distance). It will trigger questions for the broker prior to real trading and set the pace for what comes next.

Demo accounts weren’t always around, so since they are available and free of charge, traders should take advantage of them to practice and learn as much as possible.