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Day Trading

Trading tips & rules for day trader

Day trading Basic Rules and Tips
 Day trading is the art of getting into a market during a short term trend and getting out from position before the trend ends and reverses.

This looks very simple plan but it's not simple to execute, especially in volatile market. Active day traders reduce the risk by exiting all trades at the end of each session because reaction to post market news and events is unpredictable.

Day trading is not advisable for small investor and due to that security and
exchange board place some restriction. Long term investor buying the partnership in particular company and day trader simply gambling that a basic difference in investing and day trading. Day traders rapidly buy and sell throughout the day with hopping that their stocks will continue climb or fall in value for the seconds to minutes they own the stock, allowing them to lock in quick profits.

Stock | ETF | Index | Option day trading is extremely risky and can result in substantial financial losses.

What is Day Trading?

Day trading is a technique to trade in stock market. The traders who are buying for day only, they not keeping any position open for another day and it’s a technique of getting into a stock market and getting out before the trend ends and reverses during a short-term trend.

This looks real simple but this is not simple to execute, especially in volatile market. Active traders reduce the risk on investment by exiting all trades at the end of each session because, Post-market news and events and its reaction to stock market is often unpredictable.

Day traders rapidly buy and sell stocks throughout the day in the hope that their stocks will continue climbing or falling in value for the seconds to minutes they own the stock, allowing them to lock in quick profits.

What to trade in day trading?

Big question for every one!!!! We got solution for that. Visit our Daily stock market forecast page, there you can get idea for stock market trend and select any stock | ETF from our list. For stock trading it's a very important to know Support and Resistance. You can trade stock, ETF, option or Index who are traded every day with high volume with high beta. Keep in mind higher beta means its move faster then other, it means more risk.

You can trade ETF or stock option, ETF option or Index option. Many ETF’s moving together with Index. You can trade Index base ETF like SPY for S&P 500, IWM for Russell 2000 and DIA for Dow Jones. If you want to play Gold you can go for HUI or GLD and for oil you can buy OIH. There are many that move with related Index.

What is best time to buy | sell for day trading?

In the stock market you can not go on time base.

You can trade on the base of price action only. You need to know stock market trend and Support | Resistance before to buy or short sell a stock. When stock come near support and stock market trend is up you can buy here, and when it hit resistance you can book profit and when stock market trend is down and hit resistance then it's a time to go short.

So for entry and exit it's a very important to know stock market | stock trend, and Support | Resistance for particular stock | Index before to buy | sell.

How many stock I can buy for stock trading?

There is no limit for trade size for stock trading.

Trade size depends on how much money in your account and your risk tolerance. If you have a margin account then you can by more with margin money (all most double), in this case you need to pay margin charge and you increasing your risk. Trade size is a very important in your trading because it controls your emotion and that directly connected with risk factor.

This is a very interesting issue; first you need to decide how much you can bare a loss!!!! That way you know your risk factor. Second you need to decide your stop loss means at what level you want to exit in case you are in wrong direction. Now difference between buying price and stop loss give you idea about how much stock you can buy with your risk tolerance for day trading or stock trading.

Who is providing live stock data and live chart?

There are many company web sites they provide live stock price and charts for stock trading in the stock market. Many broker also providing live quotes and charts. If you are a TDameritrade client then you no need to look for live quotes and stock charts, they providing free of charge.

Here are some list for live quotes and charts:
cbsmarketwatch.com
bigcharts.com
esignal.com
finance.yahoo.com
and many more providing live stock data and live chart for stock trading

I don't own any stock, then how can I short sale?

Short sell means you don't own any stock and you selling it. When you expecting stock market goes down due to some reason and you want to take advantage of that, in that case you can do short sell of stock | ETF | option.

In short sell you don't own any stock but you selling it first by borrowing from broker and when stock price come down you buying it back, means first selling at high price and when price come down that time you buying it at low price. This is a good strategy to make money in down trend market.

First you need to know trend, once you know trend is down, now you need to search for stock that are trading in resistance zone, that the stock for short sell.

You can short any stock trading above $5, and that you need to buy back at low | high price.

Importance of Psychology

Stock market every day moving with some kind of fixed patent, day trader need to identify that patent and follow that patent.

The stock market moves in five cycles with three major cycles in the major market trend and the two cycles in opposite to stock market major trend.

Only it's important to find out the stock market major trend.

For more detail visit: Psychological Stock market behavior

Related Reading

What is Day Trading?
What to trade in day trading?
What is best time to buy | sell?
How many stock I can buy for stock trading?
Who is providing live stock data and live chart?
I don't own any stock, then how can I short sale?
Importance of Psychological Is there any restriction from Stock Exchange for day trading?
How to start Day Trading?
How to find out stock market trend for day trading?
How to find out Support | Resistance for day trading or stock trading?
How can I trade Index for day trading?
Is it ok to trade penny stock in day trading?
Day trading rules | Day trading strategies | tips
Importance of technical indicator | analysis
Day trading | stock trading - time frame for technical analysis
Which technical indicator to use for day trading | stock trading?
Importance of Stop Loss in stock investing.
Related reading
How to use technical indicators for Day Trading
How to find stock for Day Trading
Success Strategy
Day Trading of Stock & ETF Option
  



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