Learn to trade – the best tips for getting started in day trading

adminonJuly 9, 2022February 11, 2022Leave a Comment

to earn a lot of money in a short time – this is the goal of many people nowadays. With daytrading this dream seems to become reality, the business sounds superficially nevertheless very easy. However, in addition to great stamina, you also need a certain amount of know-how to be able to earn money in the long term with this investment strategy. In the following, we tell you the best approach to day trading and what risks to watch out for. The most important facts in a nutshell and our best tips and recommendations right at the start!

Learn to trade – recommendations& tips

Learn to trade – the most important in a nutshell

Learning to trade - the best tips for starting day trading

How daytrading works?

The term day trading refers to short-term trading on the stock exchange. The trader opens a trading position within one day and closes it again on the same day. The aim is to profit from price fluctuations within the day. The speculation objects are not only shares, also with cryptocurrencies, foreign exchange and derivatives can be traded at the daytrading.

Tip: if you are interested in investing for the long term, you can find more information in our guide article on ETF savings plans.

Day trading – not a new phenomenon

Especially on social media platforms like instagram and twitter you can read more and more about daytrading. But the origins of this trading style go back several decades. Thanks to the introduction of the electronic communication network (ECN) in 1969 in connection with the NASDAQ system (national association of securities dealers automatic quotation) from 1971, day trading became possible. Stock trading was digitized and made available to the general population of the U.S. with the creation of tradeplus in 1982.

These taxes are incurred in daytrading

in germany, investors have to pay taxes on their capital gains. This also applies to daytrading profits. the maximum tax deduction is 25 percent. On top of that, the solidarity surcharge and if necessary. Church tax (the amount depends on the state). The taxes incurred are independent of the domicile of the daytrading platform, so taxes are also incurred by foreign trading providers.

For each person there is also the basic allowance of 9.000 euro plus the savings allowance of 801 euro. Accordingly, if you earn less than 9.801 euro, your profit is exempt from taxes. Any losses from daytrading transactions can be offset against your profit.

Learn to trade – already known?

For capital gains, first the personal income tax rate applies. If the tax rate is below 25 percent, you will have to pay less tax

Tip: if you have been charged too much tax, you can have it refunded via your tax return.

Step by step to becoming a day trader

If you want to start day trading successfully yourself, we have summarized the most important steps for you in our instructions below. Simply learning to trade? How to become a daytrader step by step!

1. Prepare yourself extensively

Daytrading is often sold as very simple. the trader is promised high profits in a short period of time. It is tempting to make short-term investments without first studying the material in detail.

That’s why we recommend: build up extensive expertise before you make your first trades. How to minimize the risk of loss. Be aware, for example, that you cannot buy and sell your positions at any time, but are bound to the opening hours of the stock exchange. you can find even more exciting tips on buying shares in our guidebook.

Tip: open an account with a day trading simulator. There you can make test purchases and sales with virtual money. How to get a feel for the price fluctuations and do targeted research when you have questions.

Our recommendation: when choosing the trading simulator, make sure that it meets your needs. Are offered the assets of interest to you? When can be traded? Pay attention to the costs – not every daytrading demo is free of charge.

Learn from experienced investment professionals!

Even more expert knowledge on stocks, etfs& co. our free online seminars cover all aspects of the. Fund managers, analysts, professional traders and other experts are available to answer your questions:

What investment strategies are promising?
Which stocks, funds and derivatives do the stock market professionals recommend??
Enter now or rather wait?

2. Decide on a platform

There is a large mass of trading platforms. so don’t use the first one you see, but compare the different platforms before opening a securities account. Read the general terms and conditions and be aware of the fees and conditions. How to avoid negative surprises later.

Product recommendation: we recommend that you open a finances.Net zero 1 depots. Here you can trade different asset classes without order fees. The account management is also free of charge.

3. test your ideas: use "play money" only

No master has yet fallen from the sky. Be aware that it can happen that you incur losses at the beginning. Do not invest large amounts of money for this reason. Instead, test your ideas with small amounts and increase them if you are successful. So you can try different assets at the beginning to become aware of the respective volatilities. If you have found a suitable investment object, for example a share, you should occupy yourself intensively with it.

Note: some investors are successful in the long run by limiting their purchases to a few objects and possessing a lot of knowledge in these niches. Especially for beginners, we recommend a broad diversification in the portfolio to better compensate for strong fluctuations.

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4. Find a suitable trading style

Basically, you can distinguish between three different trading styles. In the classic day trading style, the trading position is held for a few hours on average. Often the trader has a clear price target in mind. When this has been achieved, he immediately sells. It can also happen that a position is closed again after a few minutes. Furthermore, there is the so-called scalping and swingtrading.

With scalping the holding time is shorter than with daytrading. positions are sold after a few seconds to minutes. So often only small cent amounts are earned. However, the more of these trades are executed within a short period of time, the more this method pays off.

Swingtrading is the holding of trading positions for a slightly longer period of time. Sales are made only after a few days or even weeks to capture the highest possible profit. Rising prices can be fully exploited, but the trader will make fewer trades.

Important: you will only find out which trading style suits you if you have already made trades. Do not focus at the beginning on a specific holding period, but make the trades so that you feel comfortable.

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5. Create your own daytrading strategy

When you have gained your first daytrading experience, you should create a plan that you want to stick to in the future. How to avoid knee-jerk reactions. After a trade, record your results and update your strategy if necessary.

A trading strategy should include the following points:

Risks of day trading

Daytrading has a high potential for investors – both in terms of possible gains and losses. If the development of a trading position is predicted correctly, investors can make big profits with only a little money. However, if you look at the facts and figures around the topic of day trading, the trend in reality looks quite different. according to a study by financial expert brad barber, around 80 percent of traders make losses within a year. In the long run, the number of people who earn profits continues to shrink.

In addition to the choice of the wrong object of action, psychological reasons also play a role. If a trader makes a loss, he is more inclined to take risks in his next trade to make up for the loss. To consider are also the trade costs. Different order commissions and third-party fees apply depending on the trading platform selected. therefore, before trading, be aware of the costs involved: the trades are only worthwhile if, after deducting the costs, you make a profit.

With a low-cost depot provider, you can keep these costs under control especially easily. our broker-comparison helps you to find the right securities depository. We checked the advantages and disadvantages of both internet banks and online brokers.

those who enter germany with a schengen visa have the opportunity to visit all 26 states of the schengen area and to get to know the countries and their cultures.

In general, tourists in the schengen area or in germany have to follow the same rules as the local ones. One aspect that is often a sticking point for foreigners, especially in germany, is driving a car in germany. after all, germany is one of the very few countries in the world where there is no speed limit on highways. If you are visiting from another country and try your hand at driving on germany’s roads, it is easy to get overconfident and quickly push the gas pedal of the rental car down too low.

Speed cameras and police checks don’t stop at tourists either. Foreigners who are caught speeding in germany must generally expect to receive a fine from the authorities. For this, the vehicle owners are identified via the rental car company, to which the fine notice then goes – at least that is the theory. It must be clearly established in each case who exactly committed the offence, otherwise no fine can be imposed.

Many traffic offenses of tourists are not punished

For vehicles with foreign plates, it is often difficult for the authorities in germany to find out the driver of the vehicle, which means that over 2 million speeding offences go unpunished every year. Determining the person who committed the traffic violation is too time-consuming and is usually not in relation to the fine demanded. If you are a tourist on a Schengen visa and are pulled over by the police, you should be able to show your passport with the valid visa. A possible fine is due immediately in this case.

However, since most offenses are recorded by stationary speed cameras, speeders from countries outside the EU in particular have little to fear. By the time their parking tickets reach the authorities, they have usually long since left the country and are then difficult to trace.

However, this does not mean that tourists and foreigners with a Schengen visa in Germany can behave as they wish and disregard the traffic rules. After all, every person who drives a car bears a great responsibility and should not drive too fast, if only out of consideration for other road users. In addition, there are traffic controls from time to time, in which police officers stop speeders and ask them directly to pay. Depending on how much someone has driven too fast, this can quickly become expensive.

What applies to tourists who drive under the influence of alcohol??

Drinking and driving is another issue that tourists entering the country on a Schengen visa should be aware of beforehand. After all, every country has different blood alcohol limits, and as a guest you have to abide by the rules just like everyone else. Otherwise, severe penalties may be imposed – but they are not always enforced for foreigners who do not originate from the Schengen area.

If you are caught behind the wheel with too much alcohol, you will have to pay a fine and hand in your driver’s license. The revocation of the driving license is only valid for germany and as soon as the tourist is back in his home country, he can apply for a new driving license and continue to drive normally. Although this regulation does not apply within the EU and driving bans can also be imposed across countries, anyone who comes to Germany with a Schengen visa is not an EU citizen, which is why this regulation does not apply.

Many countries outside the Schengen area have more relaxed traffic regulations than germany and often issue a new driver’s license despite misconduct abroad. However, the case is different from country to country and depends on the local authorities and laws, about which affected persons must inform themselves in case of emergency.

Germans have to undergo an MPU, foreigners almost never do

Medical-psychological examination MPU with driver's license and car keys

Germans who have been arrested for high levels of alcohol behind the wheel or for several driving violations (e.g., driving under the influence of alcohol, driving under the influence of alcohol, driving under the influence of alcohol, etc.).B. If you accumulate points in the traffic offence register in flensburg and then exceed a certain minimum value (the limit is 8 points), you must appear for the MPU (medical-psychological examination). This is not only expensive for the person concerned, but above all very stressful, which is why it should be avoided getting to this point in the first place.

Since germany is a transit country, through which many drivers from neighboring countries also pass, there is repeated criticism that traffic offenders from other countries are usually not prosecuted beyond the borders. Overall, 24% of all road traffic offenses committed and registered in 2015 were committed by foreigners. In theory, the driving license is then taken away from foreigners and an MPU is ordered, but this usually does not happen and the driving license is simply re-applied for in the non-European home country.

Foreigners with a Schengen visa who are not registered in Germany do not have to worry about having to undergo an MPU. But if a tourist, under the influence of alcohol or driving too fast, causes an accident, property damage or – worse still – injures or even kills people, he or she will face a criminal prosecution from which he or she will not escape in the near future.

The traffic rules should therefore be observed, otherwise human lives are quickly in danger. Fines are also still due in the event of traffic controls and the driver’s license can be confiscated, at least for the german area, so that at least as long as the stay in the schengen area lasts, there is no longer a valid driver’s license. Depending on the reason for the visit, this can be very annoying, namely when tourists are dependent on a car. Anyone who still drives despite having their license revoked is liable to prosecution for "driving without a license," which can result in a lengthy trial and should be avoided at all costs.

Debtors are allowed to enter into new liabilities during the private insolvency process. The only question is whether one’s own financial resources are sufficient for a car, because the attachable portion of one’s income has to be handed over to the insolvency administrator.

A car loan can be an unreasonable liability. If a creditor learns that they are buying a car while private insolvency proceedings are ongoing, they can apply for the denial of residual debt discharge.

Yes, there is nothing to stop you buying a car once you have completed your private insolvency proceedings. However, the residual debt discharge remains stored at SCHUFA for three years. This could scare off potential contractual partners – whether bank or car dealer.

Significance of private insolvency for the debtor

To what extent is it permissible to buy a car while insolvency proceedings are ongoing??

Before we answer the question of whether you can buy a car during personal insolvency, we must general conditions of this insolvency procedure take a closer look.

For the debtor, the goal of consumer insolvency is to be free of debts afterwards. This discharge granted by the insolvency court discharge of residual debt is, however subject to certain conditions:

The debtor must attachable assets and income to the insolvency administrator cede.
He may not no unreasonable liabilities enter into and also not waste any assets. Otherwise, he is threatened with the denial of residual debt discharge.
This also applies if he income situation not discloses or conceals parts of his assets.

This obligations make it difficult for the debtor, during his private insolvency, a to buy a car. Let’s take a closer look at this.

Buying a car despite private insolvency – pitfalls and obstacles

Interested parties can buy cars from the insolvency estate - as part of an insolvency auction at which the debtor's assets are liquidated

Interested parties can buy cars from the insolvency estate – in the context of an insolvency auction at which the debtor’s assets are realized.

During consumer insolvency, debtors cannot freely dispose of their entire income. Because it is only the seizure allowance have at their disposal, it should be difficult fall, to save enough money, to buy a car despite ongoing insolvency. this means that car financing from their own funds alone is out of the question.

An alternative would be a car loan. But this is also likely to be difficult. For the debtor may not create unreasonable liabilities during the insolvency proceedings, and also not wasting assets. Anyone who buys a car during private insolvency buying a car on credit wants to go with it possibly unreasonable new debts and risks so that its discharge of residual debt – provided that a bank can be found that will grant such a loan despite insolvency.

Getting the loan alone is likely to be a difficult undertaking. Every bank will check the customer’s creditworthiness before granting credit and one SCHUFA information obtain. Then, at the latest, it will learn of his private insolvency and will refrain from granting a loan due to the high risk of default.

Assuming the debtor manages to overcome these hurdles and buy a car in spite of his private insolvency. Then there is a risk that this vehicle as an attachable asset again falls into the insolvency estate and is seized by the insolvency administrator.

Buying a car after private insolvency – a question of creditworthiness and financial strength

In case of doubt, it is better to wait and plan the financing carefully instead of buying a car during personal insolvency

In case of doubt, it is better to wait and plan the financing carefully instead of buying a car during private insolvency proceedings.

So it is easier if the debtor can tolerated until the insolvency proceedings are completed.

In the next three years after the discharge of residual debt, his creditworthiness will usually be assessed very poorly. This is because the SCHUFA stores the residual debt discharge in its data for three years. A SCHUFA report will still be negative long after you have successfully completed your private insolvency.

A car financing also needs to be well thought out and calculated. Anyone who makes a mistake here and, for example, chooses the wrong loan, may end up in a debt trap.

Especially for consumers who have only insolvency behind him have, this is fatal. you can only after ten years again a private insolvency with residual debt relief go through.

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