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London, April 9, 2020: As the coronavirus has continued to spread, many businesses have asked their employees to work from home and equipped them with high-speed laptops and smartphones. Amid an economic collapse and layoff spikes, some people have elected day trading as a part-time activity.
According to experts from LCG, day trading requires developing a detailed strategy and the consistent execution of a trading plan. With spare time at home, the occasional trader can become a day trader.
Markets are observing unprecedented times and significant worldwide economic disruption, but experienced traders know that volatility is offers extra potential as long as the additional risk is understood.
”Price moves that typically take weeks to materialize are happening in hours. Things like the price of oil losing two-third of its value in the first three months of this year are capturing the public imagination. But capturing this volatility is far from a given and many traders get caught offside by not adjusting quickly enough. Having a trading strategy that can adapt parameters like profit targets and stop losses is paramount,” explains Jasper Lawler, the Head of Research and Education at the LCG (LCG).
Day trading is the practice of buying and selling a financial asset within a single trading day. Known as day traders, investors that follow this practice sometimes make use of financial leverage. This means taking bigger positions relative to the amount of funds they have to trade which can lead to bigger wins and losses. Day trading is most commonly seen in the foreign exchange and stock markets.
Due to the short time frame involved and the use of leverage to maximize profits, day trading is normally reserved for investors that are knowledgeable about the financial markets. The trader must develop a clear strategy and have enough discipline to stick to it. Day traders focus their activity on only a few assets, opening their positions on the market throughout a trading day and closing them before it ends.
Following the latest economic news and events is important to a day trader. It helps to understand them how a specific asset will perform over the coming day and allows to adjust their strategy accordingly. Technical analysis is also central to developing an idea of how a given asset may move.
LCG is seeing an increased interest from people wanting to take advantage of volatile markets. The number of those looking for information on mobile devices related to daily affairs analysis, trading psychology and strategy have risen by 25 %. According to the online brokerage firm, traders now spend more time on learning risk management techniques via webinars and expert analysis on market movements via social media as well as specialized thematic cheat-sheets to reflect the current market opportunities.
LCG offers trading to its clients on the trading platform