Day trading can be a highly lucrative trading strategy that can provide profits in as little as one day. There are several day trading strategies that savvy investors use, including setting aside sufficient funds, timing trades, and understanding the right time to buy and sell. Here we discuss various strategies you can implement to maximize your earnings when day trading.

Strategy #1: Make Use of Momentum

The momentum strategy is popular among day traders just getting started and entails acting on trades based on news sources. With this strategy, you'll need to identify significant trending moves with high volume in order to make the best trading decisions. Many stocks move at least 20% to 30% each day, providing several opportunities to use this strategy. Once you identify this movement, you hold your position until signs of reversal are evident and then get out of the stock.

Strategy #2: Set Aside Funds and Limit Your Losses

Limiting how much you risk and setting aside appropriate funds are two of the most important day trading strategies for beginners. You should first open a trading account in which you put the funds you'll use when day trading. Then, it's important to determine how much capital you're willing to risk on a trade before beginning to day trade. Most savvy day traders risk 1% or 2% of their account for each trade or less. 

For example, if you have $20,000 in your trading account, you'll want to risk $200 to $400 per trade or less.

Strategy #3: Know the Right Time to Buy and Sell

Many day traders begin trading as soon as the market opens, which is usually at 9:30 a.m. EST Monday through Friday. However, the volume of trades contributes to the overall price volatility of stocks during these early hours. Newer day traders will benefit from reading the market when it opens and waiting until the afternoon to make trades to avoid volatility. As you become more seasoned, you can begin making trades at market opening. 

Strategy #4: Focus on One or Two Stocks

When first starting to day trade, it would be beneficial to choose one or two stocks to focus on for the first few months. Each stock requires you to track its activity, so trying to track multiple stocks at once when initially starting out can be overwhelming and result in overlooked profit potential. Choose one or two stocks and spend your day-trading time tracking these until you feel comfortable enough to add more stocks to your plate.

Strategy #5: Find a Mentor

There are many seasoned day traders out there who would be happy to give you feedback and support when beginning your day trading career. Choose a mentor or a community of professional day traders and lean on them as you learn the ropes and get acquainted with the ins and outs of day trading. 

By incorporating these strategies into your day trading career, you'll be able to maximize your investment earnings and make the most profit possible.

Author's Bio: 

Marina Pal is a renowned author and social media enthusiast.