Learn how to day trade online with our day trading for dummies guide. There are six things every beginner should know before starting to trade stocks. Everything you need to know about day trading will be revealed by this day trading for beginners guide.

 

 

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In this trading tutorial, we give you six day trading tips that will teach you how to trade stocks. Day trading is a legitimate career that can give you freedom from your regular 9 to 5 job. We have created this day’s guide for dummies so that you can avoid the most common mistakes that novice traders tend to make.

We go over the basics of day trading and more advanced strategies.

So, do you want to learn how to day trade?

Let’s start by answering the first basic question: What is day trading?

What is day trading?

Day trading is the act of buying and selling a financial instrument within a single trading day.

When you open a trade with the intention of taking advantage of small intraday price movements and close that trade within the same trading day, you are day trading.

Pretty simple, right?

The only thing to remember is that if you close a position before the market closes, you are a day trader.

Eg: if you buy and sell Bitcoin within a single trading day, you are trading Bitcoin.

Many successful traders use day trading strategies as opposed to long term trading strategies. It is considered as one of the best ways to get rich quick. But we must also remember the serious risks that come with day trading.

Deciding which style of trading is better, day trading or long term investing is more than just your personal preference. There are several key factors such as mental discipline, your ability to perform under pressure. It’s also important to remember that you can still fail if you don’t have the right approach.

You may be asking yourself, “should I day trade?” In the next section, we discuss the core qualities you need to become a successful day trader.

Who Should Day Trade?

Wondering if you should day trade? The way to profit in any market (stocks, Forex, commodities, cryptocurrencies) is to find a trading style that suits your personality. Some people have a natural skill set that is more suited to day trading than others.

Being a successful day trader requires much more than just a good day trading strategy. You must also:

  • Spiritual discipline.
  • Quick thinking ability.
  • The ability to work under tremendous pressure.

If your personality doesn’t match your trading style, you could end up in a risky situation. For example, if your trading style wants to move more slowly, you may not be suited for day trading. You will be better suited for swing trading. You basically need to understand your trading timeframe personality.

Veteran trading psychologist and bestselling author Brett Steenbarger discovered that trading success means focusing on your personality strengths.

Another thing to remember is that day trading also has regulatory implications. FINRA only allows you to participate in this form of trading if you have at least $25,000 in your account. This is also known as the PDT rule (pattern day trading).

So should you try day trading?

If you have more than $25,000 in your account and work well under pressure, day trading is a good option. It depends on your trading personality, risk tolerance and financial liquidity.

If you are lucky, fill in all the requirements in this section. You are one step closer to making a career as a day trader. Now, you need to learn the right way to day trade. For those of you who don’t meet the requirements or don’t want to risk your pension or savings, you can always use a social trading platform to copy a professional day trader.

Why day trading? – Advantages for day trading

So what are the benefits of day trading?

  • No overnight risk to hold the stock.
  • You can earn money both when the stock price goes up and when the stock price goes down.
  • You can use an additional margin. The use of leverage and quick entry into the market trades the stocks of the day trade.
  • You don’t need to do detailed research on the fundamentals of the business. You are only speculating on the daily price movement.
  • You can make money quickly compared to long term trading.

These are just a few benefits that day trading can offer. This should motivate you why day trading is a good approach to trading financial markets. You may also be interested in our guide to day trading ETFs.

Next, we need to learn how to day trade stocks in a way that can give you consistency.

If you want to be interested in day trading for a living, this 3 step process will teach you how to trade stocks successfully.

See below:

How to trade stocks

Learning how to day trade involves more than just choosing the best stocks to day trade. It requires a system of planning, practice and patience. Here are some key principles to follow when starting day trading.

Rely on the “Three P’s” Rule:

  • Planning – you need to develop your own winning plan for the winning day or you are planning to fail. It is important to have a personal chart for your trades because there are many storms you can experience when trading.
  • Practice – An essential piece of your trading toolkit should be practicing your strategy until you master the game of day trading. After all, repetition is the mother of all learning.
  • Patience – once your trading plan is ready, be patient with your rules.

You need to know when to day trade, what time of day to trade, what day stocks are best to tackle and what day trading strategies to employ.

If you can master the art of patience and follow your daily rules, it can be a real game changer for your trading.

If you really want to improve your success rate and further optimize your strategy, you need to know the best trading hours.

See below:

When are the best times to day trade?

So, what is the best time to day trade? The best times for day trading are during the first and last regular trading hours between 9:30 – 10:30 am EST and 3:00 – 4:00 pm EST.

The stock market tends to produce most of its price movements during specific times of the day.

It is well documented that the stock market is most volatile during the first hour of the trading day (9:30 – 10:30 am EST) and the last hour of regular market trading (3:00 – 4:00 pm EST). These are often referred to by the pros as the power hour supplies.

A day trading strategy cannot survive without volatility. Volatility is the life and breath of any successful day trader.

Now you have the mind of a calculated sniper ready to patiently wait for the best trading opportunities.

There is one more thing left for you to complete your day trading education. If you want to take your game to the next level and approach day trading the right way, you need to learn how to trade the stocks with the help of a chart.

Day Trading Strategies – Price Action and Chart Patterns

Day trading strategies usually rely on two types of stock analysis: fundamental and technical analysis.

To find potential day trading opportunities, you need to focus on the chart-based technical analysis. You only need to have one good price action pattern that repeats every day to succeed as a day trader.

Our team at Trading Strategy Guides has compiled the most comprehensive guide to different day chart trading strategies. To understand the psychology of a chart pattern, start here: Step by Step Guide Strategy Trading Strategy.

If your favorite stock tends to generate the same pattern over time, chances are that the stock will follow the same pattern as it did in the past. Therefore, we recommend studying historical stock charts to find repeating patterns.

When looking for a daily pattern, only look for clean and easy price action.

If you find it difficult to determine whether or not there is a pattern on the stock chart, chances are that it is not a tradable stock pattern. You need to look for predictable and reliable stock chart patterns to be a successful day trader.

For example, a breakdown that occurs during the first hour of regular trading hours and is accompanied by increased volume has a very high probability of being a follow-on. The best way to make day trading decisions is to wait for a close above the resistance level. You will also want to see a close below the support level before selling the stock short.

Day trading is an easy and clear pattern that takes advantage of the volatility generated by breaking these key levels. This is a great method to learn how to day trade stocks and grow your account.

Also read this article on the best platforms for day trading .

Final words – how to day trade

Day trading requires intense focus. Learning how to day trade the right way can help you achieve financial independence. Once you set up a profitable trading plan, you will be able to spot recurring and profitable stock chart patterns. If you need help, you can achieve all of the above through our trading resources and trading strategies that are so popular here on the TSG website.

Before developing your own day trading strategies, cover every point in this article before risking any of your hard earned money. With the S&P 500 hitting new highs almost every day, there’s never been a better time to start a day trading stocks.

Finally, we hope you enjoy this day’s ha