If you like the idea of the fast-paced and exciting world of day trading, then you'll be pleased to learn that it's easier to get started than you might have thought. While it takes time, strategy and skill to become an expert in day trading, anyone can get started and begin building their talents. All you really need to jump in is a good internet connection, some cash, and a strategy.
Saying that, it's important to remember that day trading is something that requires a lot of focus. You will need to stay committed to your plan as you go and focus on improving over time. You might lose some cash as you're learning, but if you focus on building a profitable day trading plan, you will see a return on your investment over time.
How to Start Day Trading Stocks
As a day trader, you'll be committed to buying and selling stocks within the same daily period. This means that you won't hold onto any long-term positions. The good news is that when you follow this strategy, you're less likely to be caught off guard by changes that happen overnight in the stock market. However, on the other hand, you're going to need to be a lot more resilient when it comes to responding to sudden alterations during the day.
Learning how to day trade involves a lot more than just knowing how to pick and choose the right stocks. You'll also need to keep the three P's in mind too. That means:
Planning: You'll need to learn how to develop a winning trading plan from scratch that you can rely on. Testing this plan with paper trading is a good idea to help cut your losses.
Practice: Any skill requires practice, and this is true with day trading too. You can't expect to jump into the market and instantly be the most skilled person there. You're going to need to spend some time developing your knowledge and expertise.
Patience: With your plan read and your practice building up, you also have to be patient as a day trader. Don't expect to win at everything, and don't lose sight of your goal.
When to Start Day Trading
Now that you know how to start your new trading strategy, when should you make the leap? Often, the best times for day trading take place during the last and first trading hours of the regular opening times for the stock exchange. This means that if you want to start early, you'll need to be online between 9:30 and 10:30 am EST. On the other hand, if you're happy to trade late, you can stick to between 3:00pm and 4:00pm.
It's worth noting that other kinds of securities, like Forex for instance, might trade better at different times of the day. The times above are only recommended for buying and selling stocks and shares. You may also notice that you have better luck at specific times of day the more time you spend checking out the market.