Posted by forex at 8:36 AM
Read our previous post
1. Read as much as possible about technical analysis before even considering day trading. Day traders should be able to look at a stock chart and recognize a pattern within seconds. Learn as many chart patterns and formations as possible and think of each one as a tool.
2. Choose a discount brokerage firm that offers low trade commission fees as well as charting software. Low commissions are important, as the fees seriously eat into profits due to the number of trades day traders made each day.
3. Trade a few select stocks as you're starting out, and focus on learning their patterns and how they trade each day. Some stocks have patterns that repeat each day or each week, if you can find the pattern, trade the stock and capitalize on it.
4. Aim for small percentage gains, and use stop losses to minimize your losses. Day traders make many trades each day, and these small gains add up. For instance, a chart pattern might show a setup that could make a 1 percent to 1.5 percent gain, so a day trader will enter the trade and set a stop loss a half-percent below the entry price. If the trade goes well, the trader might make a 1 percent gain, which can really add up if repeated 50 times a day.