Posted by forex at 2:21 AM
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1. Read 'Reminisces of a Stock Operator' by Edwin Lefevre, 'An American Hedge Fund' by Timothy Sykes and 'Confessions of a Street Addict' by Jim Cramer to gain insight into the psychology of day trading.
2. Contact a local brokerage or trading firms and request to shadow a broker or trader.
3. Study the effects of different chart patterns. There are many stock patterns that are well known throughout the trading community. The way a stock reacts once it matches a particular stock pattern is a self-fulfilling prophecy, because stock patterns are so well known throughout the trading community.
4. Watch how level II quotes effect stocks. Level II quotes show the bid, ask and the amount of volume of every market maker. A bid is the price at which a trader is willing to buy a stock and the ask is the price at which a trader is willing to sell the stock. Volume is the amount of shares tradewd.
5. Study the effects of the different levels of price barriers and support levels of stocks. Price barriers are historical prices which a stock is unable to go above. Support levels are similar to price barriers, except support levels are prices which a stock is unable to go below.
6. Open a paper trading account online. Paper trading is virtual stock trading. No shares are exchanged and money is neither lost nor gained. Buy and sell stocks as if the stocks and were real. Evaluate whether you are capable of profiting as a day trader.
7. Open a stock account with a brokerage firm. Decide a broker that is right for you. Different brokers offer varying fees, commissions and minimum account-equity requirements.
8. Request an account application and follow your brokerage firm's instructions to fund the account.
9. Evaluate stocks to day trade based on the knowledge you have learned. Make sure to look at multiple chart views to find price barriers of stocks when day trading.