Day trading is a method of stock trading, where a trade is opened and closed on the same day. At the end of the day, stock position should be nil. Such traders are called as Day Traders.
More and more people are getting attracted to this type of trading, because of the numerous benefits it poses. It appears simple, easy, and lucrative.
Before you venture into this business, find out whether it suits you. It is not for all. Have a clear idea as to what it takes,before you venture into this. You should be like a lion catching its prey.
Familiarize yourself with different types of charts and different types of chart patterns. Learn about different types of indicators. You should become thorough in technical analysis. You should be so much thorough, as to make a fast decision. Your knowledge of Japanese Candlestick Patterns will give an edge to your trading success.
Invest in yourself. Read trading books. Educate yourself. Subscribe to courses.
After studying different aspects of this trading, develop a strategy to trade. Prepare a trading plan. In the beginning if you cannot develop a strategy of your own, best alternative is to follow a proven strategy from a veteran. Develop your own rules and your own checklist. Avoid making same trading mistakes.
You should have a good trading set up. That includes a good PC, high speed internet, real time data, day trading software, brokers who can cater to your requirements, etc;. You may also try automated trading system or trading robots.
Considering that you have acquired all the above knowledge and materials, the first step I advice you to take is to start paper trading. It puts you in the track. It is like learning swimming with the tubes on. Even if you do not swim, you will not drown. Once you become confident, you can swim with out the tubes.
Your confidence does not mean that you will yell, “Ya! Now I know day trading. I can make tons of money”. No. No my friend. Confidence should be based on your trading records and trading journals. Your trading records should certify you that, “Yes. Now you know little bit of day trading. You may now expose yourself to little risk. You may now switch from paper trading to real cash trading.”
So, start with a small investment. Adopt money management. If I were to give you my single most important advice, it will be money management. Even if you make mistake elsewhere, you will be saved by money management. It is like your life jacket, which you wear even though you know swimming.