How to Day Trade with an Online Trading Account
One form of stock market investing is day trading. It involves the buying and selling of stocks, currencies and other security instruments on the stock market during a single trading day. Day trading is the opposite of the conventional stock trading strategy of buying stock shares and holding them for months or years until a sale. Although you can make a profit day trading, substantial risks are involved, particularly if you are trading with a large amount of money.
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Instructions
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Create an online account with a direct access online broker. A direct access broker is a specialized brokerage firm that provides direct access to online trades, lower trade commissions and execute trades quickly. A direct access broker, however, often requires substantial capital to create an account, such as $30,000 or more.
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Transfer funds from your bank account into your direct access broker trading account. You can only initiate trades with funds in your brokerage account. Wait for all of the funds to transfer into your brokerage account, which may take several business days.
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Use the direct access broker's stock research and tracking tools to find stocks and other securities to purchase. Knowing which stocks to buy involves experience and a great deal of chance. Initiate a trade to purchase shares of the stock. Choose the option on the direct access broker's site to purchase the stock, immediately, at the market price.
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Track the value of your stock purchase using the direct access broker's online trading system. You should have access to various charts displaying data on stock trading volume, value and other metrics. When the stock increases in value from your purchase, initiate a trade to sell the stock immediately at the market price. You may wish to wait a period of time to see if the stock price increases further, but you risk that the price will go down. Repeat the process for different stocks until the stock market closes for the day.
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Tips & Warnings
Generally, day trading online produces worthwhile profits when large amounts of stock are bought and sold. This is because a stock usually only has minuscule changes in value each trading day.
