Posted by forex at 4:20 AM
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1. Find a low cost online brokerage. You are not interested in full-service from your broker. You don't want trading advice from your broker. If your broker knew how to trade he would not be a broker. Find a brokerage with low transaction fees, especially for people who place a lot of trades.You will need at least $25,000 to day-trade with a margin account. FINRA classifies anyone who places more than 4 trades in 5 days as a day-trader, and these persons are required to have $25,000 equity in a margin account. A margin account is where your broker extends a line of credit above the cash and equity in your account so you can place leveraged trades.If you don't want to trade on leverage, then there is no minimum requirement.
2. Learn technical analysis. Technical analysis is the art of reading stock charts, and trying to interpret the likely movements of stocks based on what the market is doing. The reasoning behind technical analysis is that all the information about the stock is already known and priced in, so the movements of the market are going to do what they're going to do. So the way to trade is to trade the momentum, and time the market swings. There are some online sites that offer tutorials on technical analysis.This is tougher than it sounds. Find some good books on technical analysis, and maybe some software that does some good charting. You can't day trade without this.
3. Paper trade. Choose a trading system, and try it out using paper first. There are a number of websites that let you open 'dummy' accounts so you can practice investing. This is how you practice your system. Just the same, trading with paper, and trading with real cash is very different because you don't fear the losses when the money isn't real.