What You Need to Know Before Day Trading?

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.


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Trading Tips

When it comes to stock trading you need to choose which direction you go, either swing trading or day trading. What’s the difference? Swing trading suits someone who wants to trade part-time and have a full-time day job and would like to earn a side income (make a lump sum every 1-5 weeks). Day trading suits someone who wants to make a career out of trading, you will buy and sell stocks every day.

The next step is to open a brokerage account with low fees, it’s important that we have a low commission on trades. Learn everything about your brokerage account, learn the platform, and study stocks.

As a beginner, start with swing trading. Everyone can make money if they follow my swing trading strategy correctly, be patient, and don’t be too eager to buy stocks, when you are a beginner you will be excited and want to buy everything, so take a step back.

We need to understand that stocks are volatile and trading may really not be for you, never invest with money that you need for daily living. Be smart, only invest with money that will not change your life if you have it or not.


Day Trading Terms.


Day Trading: This is the buying or selling of stocks on the same day or same hour.


Pre-market trading - Some stock trading platforms allow traders to buy or short stocks before the market opens, or before normal stock market hours. Such as the Nasqas which opens at 9:30 a.m. and closes at 4:00 p.m.


Shorting stocks: This is the practice of betting against a stock, for example, you bet that tesla stock will go down in price today. We would open a short or also called a short position and when the stock price drops we buy it back for a lower price and that is the profit. It’s the opposite of the traditional way of buying a stock and selling it when it goes up in value, we short the stock and in order for us to close the trade, we need to buy it back.


Catalyst: This is news or an event that will move the stock price higher or lower.


A positive catalyst will move a stock price higher and could be an announcement of a new product release, a good earnings report that beats analysts’ expectations, analysts upgrading the price expectation or stock rating to a buy, large investors or hedge funds buying stocks.

A negative catalyst moves the stock price lower and could be a poor earnings report that missed analysts' expeditions, a lawsuit against a company, war, or a pandemic, large investors selling stocks, a CEO stepping down, a bad earnings report missed analysts expectations, analysts downgrade the price expectation or stock rating to a sell.