Day trading platform in Nigeria
There are different methods of investing. Based on the duration of investment transactions, we distinguish between long-term investing, medium-term investing and short-term trading.
Among traders, day trading, which is short-term trading, is particularly popular.
As the name implies, all deals in day trading are opened and closed on the same day. It is often also called intraday trading.
Like any other trading method, intraday trading has its own characteristics, methods and approaches. For day trading, we choose a platform with specific features and characteristics. Also, not everyone can become a day trader - this requires certain qualities.
But first things first. In this brief overview we will look at the features of day trading, who is a day trader and how to choose an online platform for day trading in Nigeria.
What is day trading? Features
Day trading, or intraday trading as it is often called, involves making trades within one trading day, without carrying them over to the next day. Intraday trading involves opening and closing short-term trades that sometimes last even a few seconds.
It is important for day traders to develop their own trading strategy and follow it rigorously.
The most popular strategies include:
- Trend Trading. The strategy is based on the assumption of possible rise or fall of the price, based on the trend.
- Scalping - ultra-short trading of minutes and seconds, characterized by fast entry and exit. It brings fast profits but requires experience.
- Trade on the news. Your job is to monitor the news and make your decision depending on the market situation. The economic calendar and the news section as well as the online chat with other traders are of great help.
- The counter-trend reversal is a rather specific strategy, built on opposite actions before the trend. That is, day traders following this strategy act in opposition to traders who choose to trade on the news.
Day trading uses derivatives trading (CFDs), which makes these trades risky. Therefore you should treat this type of trading responsibly and start with small amounts of investment to gain experience. Day trading is mainly for experienced traders who know how to correctly evaluate market conditions and possible risks.
Day trader: who is he and what qualities should he have?
Although day trading offers great earning opportunities and fairly quick profits, you should also remember that the risks are much higher. Just as quickly as you make a profit, you can lose all of your invested funds.
This trading method is not suitable for everyone. When it comes to the psychological portrait of the modern trader, the recognized market experts note primarily what personal qualities a day trader should have.
First of all, you should remember that day trading involves very active participation in trades, which sometimes last for very short time intervals. Therefore, more than anywhere else, it is important to be focused, concentrated, and in a way, cold-blooded. A person who is distracted and not attentive to details cannot succeed in day trading. In addition, self-discipline and strict adherence to the chosen strategy is important.
A day trader is a person who understands that trading is not a game of chance. There are clear rules of the market and you need to learn them and not act at random.
Modern trading platforms offer free video tutorials on trading, and there are many other sources of information on day trading, which can help you learn.
A day trader must always be 'on': focused, attentive, calm. The complexity of intraday trading lies in the instantaneous movements of the market, sometimes even in fractions of a second. A trader has to be ready for these changes. The main thing here is concentration and the ability to stick to the strategy in a cold-blooded manner.
Technical analysis is the main friend of a day trader, it helps to determine the market trends, so a day trader should have a good knowledge of it as well as know how to use various indicators.
The ability to make important decisions quickly is another necessary trait for a day trader. Fast changes of the picture on the chart, high losses at wrong investments, hyperdynamics, complexity of technical analysis - these are aspects which often make a trader tired and psychologically exhausted and lead to abandoning this trading method.
But you should remember that there are no quick results. If you are willing to work hard on yourself, gradually gaining experience, if you agree to push the turnover moderately, then you have every chance to succeed in day trading.
How to choose a platform for day trading in Nigeria?
The day trading platform is software developed by the company to enable you to carry out all your trading operations over the Internet. With an online trading platform, you can open and close trading positions, follow market news and track asset price charts right from your laptop or even your phone.
Why is the daily trading platform a separate issue? Because the online daily trading platform requires a number of special features and tools that enable traders to start trading on the same day.
What are these characteristics? In addition to simple and straightforward registration, simple deposits and demo accounts, it is important to have stop orders to protect your trades, as well as indicators for technical analysis, which are especially important for day trading. The modern brokerage market in Nigeria offers a good selection of trading platforms to meet all of these requirements. Here we will tell you what points are important and should be considered when choosing a platform of this type.
Fast and easy registration
For traders, especially beginners, it is very important that the complexity of understanding the trading process is not aggravated by technical difficulties in registering and executing transactions. The platform developers understand this, so registration on the platform is a simple process that takes only a few minutes and does not require any special knowledge or skills. To register on the platform, follow these simple steps:
- Visit the official website of the broker and find the "registration" option there;
- Click on the "register" option and fill out the registration form, indicating your name and email address;
- Click on the "create an account" button;
- Go to the specified email address and open the email automatically received from the system with a link to confirm your registration. Click on the provided link.
Once your registration is confirmed, your account is ready to use. Later, when you use the platform and need to withdraw money from your account, or if the transaction amount is very high, the system may ask you for additional verification details. This is done for the safety of your funds. In this case, you will need to follow the system prompts (for example, "make a scanned copy of your ID" or "turn on the camera to check photos", etc.).
The ability to open a demo account
An important difference in the quality and reliability of the online trading platform is the demo account. This account is for performing test operations on the platform. It completely copies the functionality and method of using a real account, but differs in that the funds on it are fictitious and cannot be withdrawn. On a demo account, you will have access to a certain amount of fictitious dollars, which you can use to perform various operations without fear or risk of real money. So you will practice and gain experience, but at the same time without fear of losing your own funds. If necessary, the number of fictitious funds can be renewed an unlimited number of times. There is also no time limit for using the account.
Convenient deposit options
You can activate a real account by making a deposit for an amount not less than the established minimum replenishment limit - as a rule, it is a few dollars, but there are also VIP offers, so choose a platform based on your financial capabilities. The platforms offer easy and convenient ways to fund your account. Click "Deposit" and the system will redirect you to the payment page. Choose the payment method that you prefer: by card or through one of the payment systems. Almost always, money is credited instantly. With these payment methods, you can also withdraw money from your account.
What financial and active markets do day traders prefer? Traders mainly trade in derivatives such as futures, options or CFDs. Most day traders work in the foreign exchange market (Forex market). If, for example, the news reports that the euro is up against the dollar, this is a special market for currency pairs. It has very large volumes and is traded 24 hours a day. Due to its high liquidity, the foreign exchange market is the most efficient financial market in the world. In other words, assets with high trading volume and volatility are popular. Besides Forex, commodities, metals, cryptocurrencies, ETFs (exchange traded funds) and stocks are also popular day trading markets.
Choose a platform that offers a wide range of financial instruments for intraday trading, as well as the ability to trade derivatives and use a multiplier in trades that allow leverage.
Tools for successful day trading
Day trading is a dynamic and complex process that requires a high degree of self-organization, concentration and focus. Modern tools such as stop orders and technical analysis indicators help the day trader in his trading. Thanks to these technical tools embedded in the platform, you can protect your operations to a certain extent, as well as analyze market trends.
Daily trading strategies usually use one of two approaches: bridging the spread or identifying short-term trends. The spread is the difference between what is offered per share (offer) and the price asked per share (price). Spread trading tries to buy at the price and sell at the buy price over and over again. Spread traders can make hundreds or even thousands of such trades every day. With the spread of just one cent, trading for difference is much less profitable than it used to be.
In general, to spot short-term trends or fluctuating trades, you need to keep an eye on technical indicators that indicate when a trend might start or end.
Technical indicators are mathematical simplifications of market movements that give some traders an idea of the future direction of the market.
Swing trading requires much fewer trades than trading spreads, with the expectation that swing trading will generate more profit than you would expect from successful spread trading. The platform should contain the technical analysis indicators you need. Choose a platform that can be configured to use one indicator or multiple indicators at the same time. This is very convenient and is an undoubted advantage when choosing a platform for day trading.
Day trading is an activity that carries a significant risk of losing money. Therefore, it is very important to be able to limit your losses. You must control your risk. Risk management options include:
- Determine the maximum amount you can risk. Never risk more than 1% of your trading balance on a single trade, which is a tried and true rule of thumb for day trading.
- Using a stop loss is an effective way to limit losses on a position in a security. A stop loss can be placed above the current high for short positions or below the current low for long positions. The principle of the stop loss function is to set a trading limit, upon reaching which the position will be automatically closed. The stop loss function helps to avoid big losses if the trader leaves the market and does not see the price change.
Check if stop orders can be used on the platform - this is one of the main tools for a day trader, because it is thanks to them that you can protect yourself from unnecessary losses. The presence of stop loss and take profit functions, their ease of installation and the ability to set your own limits on operations is an important point in choosing a platform for day trading.
Principles of Successful Day Trading
Despite the platform's accessibility in terms of the ease of registration, the amount of limits available and the ease of use of the platform, day trading is a complex process.
Statistically, 80-90% of day traders go out of business. Why is this happening? The reason is that many people act randomly, perceiving day trading as a game of chance. In fact, this is not the case. Trading, including day trading, is a science that requires knowledge of how the investment market works, analytical thinking, developing a trading strategy, tracking market trends, etc.
The main reasons for day trading failures are:
- Lack of experience. Many people think that if it is so easy to use the online platform and you can buy any asset with one click, then there is nothing complicated in the trading process itself. Disappointment will not keep itself waiting: when the account balance drops, the trader realizes how little he knows about market mechanics and trading strategies. Like any profession, trading requires training and time to learn.
- Lack of capital: Due to the high leverage that some brokers offer, many newbies may get the illusion that they can live comfortably with trading capital of € 10,000 or less. Therefore, they take great risks to get the monthly income they need. This is a sure way to lose money.
- Lack of discipline: This is probably the main reason for traders' failures. Many people try to get "their" money back after a loss by increasing their bets and moving from trading to betting on the markets.
- Without a business plan: Would you invest thousands of euros in a company that does not have a business plan? So why do many operators believe that this is not necessary? The trading plan lists all the strategies for market events and defines your risk and capital management strategy. Many traders are spared this problem and do not consider a trading plan, which often leads to disastrous results.
All of these points can be avoided and you can trade at a profit. To do so, learn the basics of trading, consider different strategies, train yourself to follow the latest market news and make your own conclusions and analysis based on them. You should not treat trading as a game of chance. It is not a game, but a hard work. Create your own trading plan, think about your strategy, and test yourself with a demo account. Nowadays, it is very easy to learn, even from the comfort of your own home, as the Internet is full of information - you will find useful lessons and articles both on the platform itself and on external resources (of course, choose proven sources of information).
Try opening a free demo account today and dive into the exciting world of day trading on the best day trading platform in Nigeria.