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Stock Trading Tips

Day Trading is when you buy and sell a stock within the same day. Most investors rapidly sell and buy stocks all day long. Many experienced day traders only trade an hour in the morning while many others sit at the computer for 8 hours. Day Traders look for a profit by investing in stocks that are highly active. They look for small price movements to take advantage of.

Selecting which stock to daytrade are based up on many factors. Day Traders will look at past experience, the stock’s volatility, the stock’s volume, technical analsyis, the general trend of the industry the stock is in, and news about the stock that day. Once you find a stock you must figure out which way to trade it. Many day tradears will do a combination of buying long and selling short. If you are buying the stock, you are anticipating that during the day more buyers are going to come in and push the stock up. If you are selling short, you are anticipating that there will be less buyers and more sellers trying to get out.

You have to decide on an entry and exit price. Looking at all the factors is what can help you decide when to get in and when to get out. Many stocks move up and down very fast, so as fast as a profit position may happen, a loss position could be in the next moment. The entry and exit points are very important for making profits. You must determine when you want to exit as soon as you get in and wait for your target. You must also determine how much you are willing to lose and set a target for that as well. The benefits of day trading include that you don’t have to lose sleep over night wondering about your positions. Your positions are squared off in a day.

Some points that must be kept in mind before indulging in day trading is that you must have a disciplined approach. You must not be influenced by your emotions or greed. Any small profit is better than a loss. Panic can creep in at times and seeing a loss position may make you want to sell quickly. Stick to your rule, your target, and discipline. It’s crucial you don’t put all your money into day trading. Keeping some money in a financial cushion is safe for any worst case scenario that may arise. Day trading is not a place for beginners but everyone has to start somewhere. The most experienced day traders started as beginners.

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