Things You'll Need:
- Online Brokerage Account
- Funds you can afford to Lose
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Step 1
First, insure that your online trading account allows you to perform intra-day trades on a single stock or option. Some brokerages don't allow this unless you have a sizable account balance (greater than $25K for Schwab). Remember whenever a stock is sold it takes 3 days to settle and thus you should not be able to use the proceeds from the sale for 3 days. In most cases, though, your broker buffers the process to you and allows you to use funds that you don't technically have. Check with your online broker to see what the restrictions are.
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Step 2
Lengthen your online day trading time frame to at least hours. Day trading via the web browser interface to your online brokerage can be frustrating and financially painful if you try to treat it like a level 3 system for trading. Don't expect to place fast trades. Specially when the markets become heated with very high volumes of trades. Online brokerages can shut down for a while with trades taking up to 10 minutes or so to execute.
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Step 3
Look for morning to afternoon type of cycles. Whether your trading stocks or options look for patterns that fit this. One such idea is earnings news related trades. With some stocks good earnings can cause a stock to run all day long with most of the activity in the morning and afternoon. Options are best for this type of strategy since they may not react as fast to opening prices as the actual stock would.
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Step 4
Last, expect that you won't be able to enter or exit a particular stock at the current price you see real time. It takes time to place an order online and to execute. Accordingly, you will have to accept pricing that is not ideal just to make sure your trades will execute. Which also means you should not go after small changes in value like level 3 traders would. Again, you need to use a longer term and larger value swing strategy for day trading with an online trading account.
