What You Need to Know Before Day Trading?

Day trading basics

What you need to know before day trading?

You will most likely lose money when you start out, due to excitement, but this is how we learn, the goal is to make more profitable trades than losses.

It’s advised to start with swing trading, it's easier, and time is in your favor, unlike day trading which is buying and selling the stock in one day, and can become a full-time career, swing trading allows you to hold a stock for up to 5 weeks and earn a part-time income.

Finding a platform that offers low commission fees is important, as this can take from your profits. Some platforms allow premarket trading before normal day trading hours, which vary, the Nasdaq opens Monday to Friday from 9:30 a.m. to 4:00 p.m. local time. It's very important to learn how to use the platform on a demo account first, their fees and policies

Only day trade with money you can afford to lose, also, it's easier as you will not have emotional attachment to your trades. If you can’t learn to control emotions, Day trading may not be for you.

Understanding the difference between a short position and a long position. A buy or long position is a term that describes when a trader buys a stock expecting that it will rise in price and then sell and take the profit. A sell or short position is a term that describes when a trader sells (shorts) a stock expecting that it will drop in price and then buy back at a lower price and take the profit.

Know your Catalysts. A positive catalyst will move a stock price higher and could be an announcement of a new product release or a good earnings report that beats analysts’ expectations. A negative catalyst moves the stock price lower and could be a poor earnings report that missed analysts expeditions or a lawsuit against a company

Thanks for viewing and remember to make sure to learn from poor trades. As James Joyce said, mistakes are the portals of discovery.

Intro to day trading

In my day trading tutorials you will learn everything I have learned from my mentor Zed Monopoly, or in his words “The right way to Trade”

Trading is the simple buying and selling of assets, just like our ancestors traded livestock or precious metals. Even buying and selling a car can be trading, you can hold and sell for a profit or loss, for example, a vintage car which is not manufactured anymore, may be popular, meaning more demand and a higher price, the longer you hold the more rarer and price will increase. The same idea with stocks, you buy as you believe it's undervalued and will increase in price in the future.

Stocks are used to represent ownership in a company, for example, tesla need money to develop there electric car, so they will sell share of the company to the public to raise money, If the tesla sells lots of cars the stock price will rise, if they don’t grow the price can drop (but we will only lose money if we sell, we can hold till the price rises again), remember in the long term stocks will always rise in price.

The difference between swing trading and day trading.

Swing trading is a method of holding a stock from 2 days up to several weeks, as all stocks will have volatility, like when traders get scared and sell their stocks the price will drop, giving us an opportunity to buy at a low price. Swing trading is a safe part-time income as we are giving the stock time to recover or do its thing.

With day trading we buy and sell daily, if you know what you are doing you can make good money within an hour. As we don’t have the luxury of time, it's best to start out with swing trading, as if you don’t know what you are doing you will lose money day trading.

Swing trading strategy basics.

The secret sauce is to buy stocks that are undervalued with potential growth, low and sell high. A stock will go down in value traders sell, meaning less demand, lower prices, usually traders ell as they get scared by poor earning report, growing competition, loss of customers, lawsuit but we need to figure out if these reasons are temporary, they usually are and the stock will bounce back up in price next month.

Swing trading strategy basics.

We use catalyst’s to determine which stocks will significantly change in price and either buy or short that stock and close that trade the same day. Tip: after ever spike in price there will be a pullback.

Start with small amounts.

How much you need to start trading can vary between what you consider a small amount. I started day trading with $250 as I was using a platform that offered 0% commission, then grew to $2000 up as I learned. I started swing trading with $2000, but as long as the trading fees are low, you can start with less.

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