Learn how to day trade and start day trading stocks
Posted by jackbandy on June 11th, 2012
Day trading refers to the practice of buying and selling financial instruments such as currencies, futures, stock markets and options rapidly within the same trading day. Traders dealing in day trading stocks use two of the most common strategies to increase their profits; leverage and selling short. Both these strategies carry their own share of risks and dangers, hence, it is the duty of the trader to know in details how to day trade in a profitable manner.
The ABC of day trading should invariably be at your fingertips; whether it is about futures, put option, delta, call option etc. With the proliferation of the internet in every part of the world and at homes, the act of day trading has increased manifold. Day trading has a lot of flexibility. You can indulge in long term trading as well as short term trading and in multiple styles. The main aim of a day trader is to capitalize the price movements in a single day. The day trading stocks are a good choice of trading that requires stock of high volume and volatility.
A host of online sites deal with part-time trading practices offering a number of benefits for your easy accessibility and gains. These sites offer different plans for different customers who are eager to learn how to day trade. There are 5x a week plan, 3x a week plan, margin etc. There are sites which allows customer to trade just once in the morning allowing them to spend the rest of their day in other activities.
You will be guided step by step on how to day trade on these online sites. You usually need to open a margin account, sign up for a subscription package say 3x a week plan or 5x a week plan and then according to the recommendations given by the sites you can start your trading activities. The recommendations are usually made via an algorithm that foresees the American Small cap market movement all through the trading day. You will need to place a market on close order at the end of the day. For day trading stocks there are a number of stocks available online which are basically traded via stock exchanges.
For your online trading you need not have to download any special software. All you need is an internet connection. Many people trade from their Smartphone these days.
As far as the 3x a week plan for day trading stocks is concerned, it is generally tailored for those trading between $4000 and $3000 per day. Herein, the recommendations are delivered three times a week. Any person whose account balance goes below $25000 will violate the pattern day trading rule. The 5x a week plan on the other hand is intended for those trading between $30000 and more daily. Here the recommendations are delivered every trading day. The advantage of this plan is that they are spared from the pattern day trading rule.
You should know the strategies on how to day trade well and not just trade. This will enable a fair return. As far as the use of brokerage is concerned, it is advisable to use low cost brokerage for day trading stocks for the maximum benefit.
Day trading stocks is easy if you know the rules for how to day trade and have a good resource with you.