Day trading is now becoming a popular way to make some extra cash during these tough economic times. Because of today’s technology, you can now make some stock trades using only your computer at home. It is a great way to get additional income if you work at home. Day trading is a bit like gambling because you can lose a lot of money if you make poor trading decisions. However, if you trade stocks wisely, you can earn thousands of dollars in a single day. If you want to start day trading to earn some extra cash, then check out this short guide. Here, you will learn how to start day trading stocks and some useful tips that will help you become a successful day trader.
Get Educated
The first thing that you need to do before you start day trading is to get educated about the stock market and day trading. Devote 20 minutes per day for studying about the stock market. There are plenty of free online guides on the internet that you can read. There are also websites like MTrader that offer online training sessions for new day traders. Online training sessions and guides will help you master the concepts and skills that you need in order to become successful at day trading.
Set Up A Brokers Account Online
Once you have learned the concepts of day trading, you can set up a brokers account online and start trading stocks. You can set up online brokers’ accounts at firms like Scottrade, E-Trade, TD Ameritrade, and TradeStation. Most firms require a minimum deposit before you can open an account with them. Choose a firm that requires only a small minimum deposit ($500 or lower) if you are only a beginner at day trading. Most firms charge about $7 per transaction.
Paper Trade First
Practice by paper trading (simulated trading to practice selling and buying without using real money) before you start trading with real money. Paper trade for a few weeks and practice your trading skills. Observe how the stock market works and use the knowledge that you have learned during your training sessions. You can start trading with real money once you are winning consistently and earning “money” while paper trading
Focus on One Market
It is best to focus on only one market when day trading. The learning curve and action of each market is different, so focus on the market where you have had the most success while paper trading. Trading penny stocks is great for beginners because it allows you to buy stocks for cheap. You can spend only $500 in penny stocks and earn $2,500 or more in a month.
Analyze your Successes and Mistakes
Analyze your successes so that you will know what worked and remember your mistakes so that you will not repeat them. Develop some strategies based on your successes and mistakes. If you have a colleague or friend who is a successful day trader, ask him for advice on how to become successful in day trading.