Day Trading Canada
Day trading can be lucrative, and it can also be risky. Day trading involved buying and selling stocks in one day. You hold securities and trade based on price fluctuations in the stock market. Day traders aim to close their position before the end of the trading day. Day trading usually involves entering and exiting multiple trades within the day.
Day traders use different trading strategies to make gains on movements in the stock market (see ‘Stock Market Investing for Beginners‘). The most common assets for day trading are forex, common stocks, ETFs, cryptocurrencies, and futures. For beginners, who are looking to get started in day trading, we will provide you with the information you require to have a shot at becoming a successful day trader. We also provide these top day trading courses, as well. Let’s take a look.
Profit.ly
Profit.ly is a website that provides advanced technical analysis tools. They help traders to track and measure their trading performance. Their analysis allows you to improve your own trading skills and learn from other traders. There are over 150,000 traders, stockholders and investors registered on profit.ly. The aim of the website is to help you maximize your profits. You can also learn how to identify and capitalize on investment opportunities.
Profit.ly gives you an insight into investment losses and gains. This allows you to learn from other trader’s mistakes. This should help you minimize your errors and improve your trading streak.
Pros
- You can choose to trial a free demo account. This enables you to learn about day trading without risking any money.
- You have access to Profit.ly’s leaderboard. Here they list the best trades for that day. You can choose to follow or subscribe to different trading gurus and receive alerts, training and advice from them.
- Profit.ly has more than 30 brokers on their website (see also our Scotia iTrade review).
- There are six different packages available. These include Free User accounts, Standard Plans, Novice Packages, Trader Packages, Pro Packages and Guru Packages. This gives users more options and allows them to choose the best account type for them.
- They have multiple trading platforms, including desktop and mobile, which enable you to sell stocks even on the weekend.
- The analytical tools allow you to track your own trading performance, as well as other people’s. You can then find the trading style that works best for you.
Cons
- The verification of broker accounts may not be as stringent as you would hope. Not all trading results can, therefore, be trusted as they may not be accurate.
- The package prices can be quite high. The pro package costs $79.95 a month.
Summary
Profit.ly helps users to maximize their winning streaks. The aim is to educate traders. They provide them with market intelligence, predicted trends (see Air Canada predictions) and any planned announcements. The transparency into other investors’ strategies for trading (see common equity), successes and failures is one of the best features of this site. However, Profit.ly allows you to choose which of your trades you put on the site, meaning that some investors may not be including their losses.
For day trading beginners who are looking for guidance and help on how to make money in day trading, Profit.ly could be a good choice. However, many traders will be discouraged by the high subscription fees. On a separate note, when talking of fees, see rules on when you can sell stocks after you bought them.
Humbled Trader
The Humbled Trader is a Youtube channel and website where traders can watch videos and receive advice about day trading. Shay, a Canadian/ Taiwanese trading expert, aims to make educational and entertaining day trading videos. Aimed at beginners and experienced day traders, Shay focuses on trading psychology, trading discipline and risk management strategies to help you become a proficient day trader (see how often to check your stocks).
Shay doesn’t follow trading patterns. Instead, she focuses on price action. She offers an alternative way of day trading as she profits from buying penny stocks, small-cap stocks, mid-cap and large-cap stocks (see also ‘Best 5G Stocks Canada’ review, Rogers Communications stocks or Air Canada stocks). Shay prides herself on offering unbiased reviews of stocks. Her main aim is to teach people how to day trade successfully.
Pros
- You have access to a multitude of videos offering advice about many different aspects of day trading. These include ‘How to Select the Right Broker’, ‘What is Day Trading’, ‘How to Start Day Trading’ and ‘Where is the Best Place to Put Your Stop Loss’.
- You will also have access to trading articles and the Humbled Trader blog.
- Humbled trader’s videos have more than 4 million views on Youtube.
- Shay recommends the trading tools that she has found to be effective and successful. She will also suggest which brokers to use when opening your trading account.
- By signing up for the newsletter, you will have free access to the weekly watch list. This shows a detailed analysis and expected price levels for the stocks.
- As a Canadian trading expert, Shay has specific knowledge about day trading in Canada and can help you to get started.
- You will be part of a trading community and can communicate with other traders in the chatroom.
Cons
- Shay does not provide information on all aspects of day trading; only those she is interested in. For those interested in forex trading, swing trading, options trading or trading other assets (see net worth), this may not be the best channel for you.
- This is a reasonably new Youtube channel, only growing in popularity this year. You may find other more experienced traders who are also offering day trading advice.
Summary
The Humbled Trader is a great option for those looking for unbiased, informative advice about trading stocks (see POW and Canada Tire when it comes to good buys) on the day market. The videos may be especially beneficial to new day traders who are looking for advice on how to begin trading. However, the videos may be less popular with experienced traders. If you are unsure whether Shay’s videos are the right fit for you, you can always check out her Youtube channel before making a decision.
Characteristics and Personality Traits of a Good Day Trader
Discipline
Profitable traders who buy stocks need to have the discipline to ensure they are maximizing their time and focusing all of their energy on their trades. If you are not giving your trades your full attention, you may miss a change in the market. The value of your stocks (see best Canadian energy stocks and nickel stocks) may suddenly drop, and you may find that you lose or owe money on your stocks.
Independence
The majority of day traders trade as a full-time job. Usually, they trade at home, alone, with nobody to ask for trading advice. You will be in charge of your own trading account and will have to make all financial decisions independently. It may be harder to maintain your trading psychology when working alone.
Quick-Wittedness
This is a fundamental characteristic of day trading. Decisions must be made instantaneously, with no chance for deliberation. You need to be able to perceive the situation, quickly calculate the risk level and make a fast decision. A day trader’s ability to calculate the risk and reward of a trade can be the difference between a successful and unsuccessful trade. On another note, investing during Christmas and other holidays can yield maximum returns and carry low risk at the same time.
Decisiveness
Day traders must be able to make fast decisions and act upon them. Your ability to assess the situation and time the market are crucial in day trading. You also need to be able to make a quick decision if the market turns and your investment and even the blue-chip stocks starts to drop in value.
Persistence
Patience and persistence are two key characteristics of day traders. Once you have found a trading strategy that you trust, and that is successful for you, sticking with it can be beneficial. At times, day trading can be frustrating. Successful day traders persist through these frustrations and continue to trade every day.
Tech-Savvy
To be a successful day trader, you should have a good understanding of the trading platform and the different trading strategies. The technical analysis (see technical compared to fundamental analysis) needed for day trading can be difficult for those who are not tech-savvy. Traders spend the majority of their time on the computer, following trades and analyzing charts. The more comfortable you are with technology, the easier you will find this.
Interest in the Markets
As a day trader trades as a full-time profession, an interest in the stock market and analyzing stock market reports will help you to stay focused. Previous interest in the markets will also provide you with some understanding of trading stocks, the technical jargon, and day trading strategies. On a related note, we also shared what happens when a company issues new shares traded in the stock market, or when a company buys back stocks.
Can Afford to Lose Money
Day trading can be extremely risky. It is wise to only invest money that you can afford to lose. The high-risk strategy of day trading may make this unsuitable for investors who plan to invest money that they rely on. Knowing your financial limits is important for day trading.
Common Day Trading Mistakes
Starting with Unrealistic Expectations
The trading goals you set should be realistic. When setting your expectations of how much gains you plan to make, keep in mind that the day trade market is volatile. It does not always behave as you want or expect. Trends can change, and one day may have fewer trading opportunities than the next.
Starting Without a Trading Plan
To trade successfully, a well-thought-out plan is vital. Know your goals and stick to them. Think about how much money you are willing to invest. Think about your risk levels and have a plan for what you will do if a stock unexpectedly drops in value like when a company is bought out. Set up your stop-loss order and make sure you stick to it.
Failing to Manage Risk
Never forget your risk tolerance levels. Ignoring your risk aversion can result in losses. Always look at the risk profile before entering a trade. See how much money you could possibly lose, and if you cannot afford to lose it, do not enter the trade. Trading with a stop-loss helps you to manage the risk. A stop-loss can limit your losses. If a trade takes a downward turn, your stop loss will automatically exit you from the trade at a pre-agreed point.
Not Committing the Time and Money to Do it Right
Unlike swing trading, you cannot effectively day trade in just one or two hours per day. You need to set regular hours of trading each day and commit to these hours. Effective time management is crucial. You should also have enough available capital to make reasonable returns without taking unreasonable risks. On a separate note, those post on stock dividends tax, explains why capital must increase to calculate the tax on a stock gain.
Despite the popularity of the two trading platforms that we reviewed above, our top recommendation is still Questrade:
The Bottom Line
Day trading can be very profitable if done correctly. However, if you begin to day trade without a thought-out plan, you may find that you are losing capital quickly. Commit time to learn the market, understand the jargon and examine the charts. Ensure you always have stop-loss orders on your trades. To be a successful day trader, choose one trading platform and stick with it. Ensure you have done extensive research and that you thoroughly understand the market.
Day trading can be extremely risky. However, if you are ready to put in the effort and commitment required to be successful, you may discover a new lucrative career.
