This year, the stock market is at a good pace. As a result, more and more people are getting into day trading. If you also wish to learn how to day trade for a living, you have come to the right place.
Today we will introduce you to the basics and the commonly asked questions.
Day trading refers to purchasing and selling financial assets – stocks, bonds, futures, or commodities – during a single trading day.
One can also define it as an act of purchasing and selling financial assets within a short time – within minutes or hours – to earn small profits that will add up to the large gains with time.
A day trader may purchase a stock, for example, at 9:30 AM and then sell it at 2:22 PM the same day. And do the same with other stocks in his portfolio. In other words, day traders trade during the day or before when the market closes.
Some traders earn millions and billions with day trading. And other traders just make a few hundred dollars. The results from day trading are not regular and predictable. After all, trading is risky – whether it’s day trading or long term.
It requires commitment, dedication, and lots of continued hard work to become a successful day trader. If you have just started trading, creating a plan is the best move.
Before you commit to day trading and starts your journey to make a living out of it, consider the following questions:
- How much money do you have in your account to start trading?
- Will you be able to balance your trading and personal life?
- If you are a student, how will you give time to trading and education equally?
- Have you worked on any day trading strategies?
Many experts,including Tim Bohen (lead technical trainer and a stock market master), suggest starting small and trading part-time. A new trader should not put himself in a situation where trading profits is their only income.
That will be stressful and will lead them to more bad trades. Instead, you should give yourself enough time and space to concentrate on learning trading strategies and skills.
What is trading? Simple, you purchase a financial instrument, for example, stocks, at a low price, and when its price goes high, you sell it. This is the basic concept. However, there are many different and complicated strategies for doing this.
In day trading, traders buy and sell stocks within one trading day. Therefore, instead of purchasing stocks and holding them for a day or more, day traders finish most of their trades within the same day. However, they should be aware of the market moves and be ready to react quickly.
Day traders mostly trade stocks. These stocks can be of giant companies like Amazon (NASDAQ: AMZN) or Apple Inc. (NASDAQ: AAPL). Or they could be penny stocks – these stocks are of lesser-known and smaller companies like Super League Gaming (NASDAQ: SLGG).
Moreover, stocks aren’t the only favorite trading instrument of day traders. Some traders also like to trade commodities like gold, silver, crude oil, etc.
Everyone wants to earn money from day trading. But for many, it seems impossible because of a lack of knowledge. This post is for such people. We wish you the best of luck on your new journey. In the end, just remember one thing – don’t let your feelings impact your decision when trading.