What is Day Trading?
Stock day trading is not your traditional stock investing. Instead of buying a few shares of stock and letting them increase in value over 6 months or over the next few years, you will buy and sell stock much faster.
Stock day trading is short term trading. Many traders use software to tell them when to buy or sell based on trends. They look at charts and guess that it will move a certain way based on where it’s been and previous trends.
Day trading a full time job. You work when the markets are open. You can do really well, break even, or do horribly. It’s a risky business that requires experience and a lot of money to start.
Who can Day Trade?
Technically, just about anyone can try to trade stocks as long as they have money and a broker, but it takes a lot to be successful at it. Of course, you need the right resources as well. First of all, you need to have time during the right time of day. If you work from 9 to 5, you won’t be able to trade unless you trade on a foreign market that is open when you’re available. The more time you have available during trading hours, the better.
If you plan to be a full time trader, you should have back up resources. Don’t quit your day job with nothing in the bank. Try to give it a try while you are working and save at least 6 months of living expenses just in case. This way you will be covered even while you aren’t making a profit.
Executing Day Trading Strategies
Day trading is all about strategies, and there are plenty of them including trend trading, channel trading, scalping, and contrarian trading. Day trading means buying and selling stock within the same day. This is very different than regular investing. It’s important to learn as much as you can about technical analysis and different day trading techniques before you start trading. The follow books will help you learn important strategies:
Before you Get Started
If you want to try your hand at stock day trading, make a plan and get to it. Spend a few months saving your money to invest and to have as back up support money. You need money to buy food and you need money to invest. The more money you have, the better off you’ll be.
In the meantime, read, study, and learn everything you can to build up a strategy. Start using a free stock market trading game to help you practice what you are learning before you are ready to invest in the real markets. Wall Street Survivor is a great game to help you practice stock day trading, and you can earn real cash prizes, too. Get started and sign up here.