The success rate for day traders is about 10%. That means 90% are losing money.
What separates the 10% from the rest is their training and skills. They’re ready to make split-second, emotionless decisions based on incomplete information. And they’re willing to admit mistakes and cut their losses.
Day trading isn’t for wimps, but it can be profitable if you play the market right. Here are some basics to help you get started.
Day traders buy and sell stocks in a day, usually closing the day with nothing open. Since they make their money on small price movements, day traders need enough capital to afford or leverage large positions that make it worth their while. Unless they buy several hundred shares of a stock, they won’t make enough money to cover commissions.
The key for most day traders is to know when to exit or enter a position. Most develop a strategy that works for them, and many focus on one or two stocks with which they become very familiar. They also place stop orders to be sure they escape losing positions.
Many use a trading platform that’s a prepackaged setup from a brokerage or specialized software company. They have a powerful desktop computer with at least two monitors. They need real-time news and data feeds to build charts that expose market trends.
Day traders must understand technical analysis, which analyzes past prices and trading volume. And they must know the tools to dissect charts and price movements, like resistance and support indicators, and the moving average convergence/divergence lines.
What separates the 10% from the rest is their training and skills. They’re ready to make split-second, emotionless decisions based on incomplete information. And they’re willing to admit mistakes and cut their losses.
Day trading isn’t for wimps, but it can be profitable if you play the market right. Here are some basics to help you get started.
Day traders buy and sell stocks in a day, usually closing the day with nothing open. Since they make their money on small price movements, day traders need enough capital to afford or leverage large positions that make it worth their while. Unless they buy several hundred shares of a stock, they won’t make enough money to cover commissions.
The key for most day traders is to know when to exit or enter a position. Most develop a strategy that works for them, and many focus on one or two stocks with which they become very familiar. They also place stop orders to be sure they escape losing positions.
Many use a trading platform that’s a prepackaged setup from a brokerage or specialized software company. They have a powerful desktop computer with at least two monitors. They need real-time news and data feeds to build charts that expose market trends.
Day traders must understand technical analysis, which analyzes past prices and trading volume. And they must know the tools to dissect charts and price movements, like resistance and support indicators, and the moving average convergence/divergence lines.