What’s stock day trading?

Sophisticated investors buy and sell stock in the same day. Popularly, this is called intraday trading.

Is day trading not a gambling?

Online stock day trading is not a gambling because here you can forecast the move of the market using statistical tools. If you take a proper training on stock day trading, you can minimize your risk based on mathematical analysis unlike the instincts working in any of the gambling games.

Do not consider day trading as a tool to ‘get rich quick’ or ‘earn million over night’.

Preparation for stock investing

a. You need to do some homework and enter the market with a clear day trading strategy and idea for stock pick.

b. Best thing is to do online stock trading and the presence of online brokers and brokerage firms further facilitates day trading.

c. Find a broker with minimum commission.

What you need to do beat the market consistently?

1. If you are new, always buy when market is going up and sell when market is going down. You can do opposite but that’s complicated. This is called trading in right direction.
2. You should consider it as a business and ready to accept loss. This means you should decide your selling price beforehand. If you achieve your desired profit, get out of the deal or if you make loss book the loss and prepare for next. Put control on your fear and greed.
3. Follow the age-old practice that not to put all eggs in a same basket. Invest money in blue chip as well as mid cap with high momentum, this will help you to reduce the heavy losses and get high return.
4. Make an initial investment and always save some part of profit as investment.
5. Loss is part of any investment. Have a modest initial target to beat the market by 10% per annum. Try to be an average investor first.

Required tools for day trader

Whether you are a new, or an experienced day trader, you need following tools.

1. A computer with Windows XP
2. Internet access with at least 256 Kbps down, and 128 Kbps up, with unlimited traffic and connection time
3. Online brokers
4. Charting and trading software like Sierra Chart
5. Access to authenticate market data

My personal recommendation to all new day traders in stock markets