How to Trade Stocks As a Day Trader
Trading stocks as a day trader is how traders who do not mind the risk of being in the stock market for a short period of time make money. Day traders monitor stocks each day by using their computers to track the movement of stocks to spot any valuable trading opportunities. The amount of time a day trader remains in a stock can vary from eight minutes to eight hours. Day traders come from all walks of life, but they share a desire to earn fast profits; they have a tolerance for high risk; and they do not mind losing money set aside for investing purposes.
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Instructions
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Purchase the needed software. Be sure you possess the software essential to trade stocks as a day trader. You will require software that allows you to track the prices of stocks in real time; software that allows you to place your potential stock picks on a chart and monitor the way they are moving; and software that allows you to execute your stock market trades from any computer with an Internet connection. Ask your stock broker which service providers are recommended in terms of software selection.
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Set up a day trading account. Find a stock market broker with whom you feel comfortable. Search for a broker in your local area or find one online who has years of experience, provides technical support for the trading platform and allows you to speak to a broker regarding your trading plan. Know that you are required to keep a minimum balance of $25,000 in your day trading account in accordance with guidelines instituted by the National Association of Securities Dealers.
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Perform due diligence. Learn to analyze the chart of a stock very quickly. Find out as much as you can about a particular stock before you place your money into a trade, such as the high points it has reached before bouncing back down (resistance); the low points it has hit and before rebounding (support); and how it reacts to certain news events. Knowing the character or behavior patterns of the stocks you track on a daily basis will help you to become a better day trader.
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References
- Photo Credit stock market analysis screenshot image by .shock from Fotolia.com
