Day Trading refers to market positions which are held only a short time, typically the trader buys and sells the same day. The concept got a bad reputation in the 1990’s when many day trading beginners jumped onto the new online trading platforms. They thought they could “go to work” in their pajamas and make a fortune with very little knowledge or effort. This proved not to be case.

Yet day trading is not all that complicated once you learn a simple, rules-based strategy for anticipating market moves, such as that taught at Online Trading Academy. Here are five secrets to day trading for beginners :

Look for scenarios where supply and demand are drastically imbalanced, and use these as your entry points.

The financial markets are like anything else in life: if supply is near exhaustion and there are still willing buyers, price is about to go higher. If there is excess supply and no willing buyers, price will go down. At Online Trading Academy, students are taught to identify these turning points on a price chart and you can do the same by studying historical examples.

Always set price targets before you jump in.

If you’re buying a long position, decide in advance how much profit is acceptable as well as a stop-loss level if the trade turns against you. Then, stick by your decisions. This limits your potential loss and keeps you from being overly greedy if price spikes to an untenable level. Exception: in a strong market it’s acceptable to set a new profit goal and stop-loss level once your initial target is achieved.

Insist on a risk-reward ratio of at least 3:1 when setting your targets.

As the Online Trading Academy instructors point out, this allows you to “lose small and win big” and come out ahead even if you have losses on many of your trades. In fact, once you gain some experience, risk-reward ratios of as high as 5:1 or even higher may be attainable.

Be patient.

Paradoxical though it may seem, successful day traders often don’t trade every day. They may be in the market, at their computer, but if they don’t see any opportunities that meet their criteria they will not execute a trade that day. That’s a lot better than going against your own best judgment out of an impatient desire to “just do something.” Plan your trades, then trade your plan.

Be disciplined.

Again, you need to set a trading plan and stick to it. At Online Trading Academy, students execute live trades in the market under the guidance of a senior instructor until right decisions become second nature. If you’re trading on your own, impulsive behavior can be your worst enemy. Greed can keep you in a position for too long and fear can cause you to bail out too soon. Don’t expect to get rich on a single trade.

Ready to jump into day trading? Online Trading Academy offers a short Trading Workshop/Seminar at its local financial education centers. You can’t beat the price—it’s free.