A day trader is a short-term investor or speculator in every sense of the word. Most of the time, he trades based on the way the market is moving and doesn't care about the basics of the stock he's buying or selling.
His trades usually don't last long, and he closes out almost all of them by the end of the trading day. Here are some things you should know if you want to start day trading online.
Choosing An Online Broker.
When looking for an online broker, commission is not the only thing to consider. Make sure you pick one with a strong trading platform that can quickly carry out your trades. http://Etrade.com and Scottrade are the best brokers because they process trades very quickly and have very good commission rates for traders who buy and sell a lot. But if you have to choose a low-cost broker, http://FirstTrade.com and http://AFTrader.com are two of the few that offer good trade turnaround times and are still low-cost.
Trading Plan
It's important to make a trading plan before you start trading, and you should always stick to this plan. A trading plan lists the different criteria and parameters that should be used to make trading decisions in any market situation. With a trading plan, you'll know whether to stop the loss and close the trade or wait out this volatile time.
Discipline
Make it a habit to follow rules. In day trading, the price of a stock that is very volatile can change very quickly. There will be times when the price moves in the wrong direction. According to your trading plan, you should take a loss when your plan says you should. Also, take profits when your trading plan tells you to. And don't trade just because you can. If there aren't any good trades, don't go into the market.
Keep your feelings under control.
Don't let your feelings decide how you trade. If you are disciplined and follow your trading plan, you won't let your emotions get in the way during a trade. Without discipline, a trader's decisions are often based on how they feel. This makes people make bad choices, which leads to trading losses. A day trader shouldn't let fear or greed get in the way of their work.
To sum up, you should always make a trading plan or system and keep making changes to it until it works. Be responsible and know when to stop losing and start making money. Last but not least, don't let your feelings get in the way when you trade.
I hope this article on how to start day trading online was helpful to you. Happy trading!
