Day trading is like a battle. Every day you will have to battle the market and make your living. Are you ready for such a living? If you like thrill, excitement and despair all together daily everyday than day trading stocks can be a best thing for you. When you day trade stocks, you make profit from the volatility in the daily stock prices that you choose to trade any day. Entering the market at the right time and exiting at the best time is an art that many day traders can’t master, so give up early. Those day traders who eventually master the art of right entry and the exit at the best possible time eventually make a fortune day trading stocks. Don’t try to pick stocks for day trading in a hurry. Many day traders make the mistake of choosing wrong stocks to day trade with no monitoring of the market moving news. What a day trader needs is a lot of focus and concentration!
First step first. Most new day traders don’t have a solid trading system. Most don’t understand that first you develop your trading system and after that you select the stocks as it is all about working with the right stocks.
When it comes to the right choice of stocks, most new day traders have a weak and shaky idea of what stocks will be best for day trading. Most bad trades are due to beginners who are trying out unfamiliar stocks. If you are accustomed and used to the rhythm and swings of a stock and you have traded that stock with success than you should pick stocks that are similar.
Now most new day traders make the mistake of trading a stock that they had discovered a night before! They lose money. Don’t trade a stock without first researching that stock for days and weeks. If you want to trade a new stock, first try to trade it with only 100 shares. After you have become familiar with its behavior you can start trading it more shares.
Now when selecting a stock for day trading you need to keep an eye on the news headline to make sure that your stock is not making any news headlines. Do not trade a stock that is in the current headlines. Go through different financial papers like the Wall Street Journal, Financial Times and watch CNBC and Bloomberg or even Google the name of that stock to see if it is making or is about to make any major headline. Your motto,”The less news, the better.”
It is critical for you to be patient with unfamiliar and new stocks. You should treat all new stocks as your first date. Someone totally new that requires exploration! Most often, the new stock that you find may not be a good stock for day trading. So, initially you should drastically reduce your exposure by trading only 100 shares and not more. Stock picking is the area where most new traders make blunders. Pick your stock carefully.
But my friends, this is not the time for day trading stocks. This is the time for day trading currencies. Trust me; forex day trading is going to make many millionaires in this decade. Forex day trading is much simpler that stock day trading.