New to Day Trading? Learn the Basics

Gone are the days when people working in financial institutes only could take part in active trading. Recently, with the rise of online trading, you can be an investor and get into the trading game.

Day trading is a lucrative career choice you can pick even if you are a novice as long as you know some trading basics and if it is played correctly.

Day trading requires you to buy and sell the stocks the very same day, maybe multiple times in the entire day. This only makes it more dangerous, especially for newbies who have no experience of the same. Even seasoned players at times get hit by their bad decisions and have to undergo loss. Day trading needs you to make a quick decision in a strategized manner, and if you can get hold of this quality, you may become a successful trader.

Popular Day Trading Strategies:

Day traders are really active throughout the day, and they need to take advantage of even the shortest market move. Day traders need to implement a set of strategies to make the right decision.

Most successful traders first develop a strategy that works for themselves most of the time, then they make sure to stick to that plan which can give them reasonable profits.

News-Based Trading:

This strategy revolves around the news announcement. The trader or investor makes decisions based on its heightened volatility.

Range Trading:

It is an active investing strategy where the trader needs to identify a range to buy and sell over a short period. It is basically a strategy to buy near the support level and sell near resistance.


In this strategy, the trader aims to make many small profits from small price changes throughout the day and does not seek some big shift in the market.

High-Frequency Trading (HFT):

This type of algorithmic trading uses a powerful computer program to determine short-term market inefficiencies and take advantage of them. A huge number of transactions are made in a short span of time.

Qualities to Become a Day Trader:

Not everyone can become a successful day trader. A few of them have the intrinsic quality to become one, and if not, they can polish themselves to acquire the qualities needed to become a successful day trader.

Here are a few qualities you should focus on developing if you want to become a successful day trader.

The Power of Knowledge:

If you try to day trade without knowing the market, you will mostly lose money. Not just superficial, but there needs to be a deep understanding of the market and a simple strategy in place. You need to keep track of news, market, latest stocks, and information on selected companies. Also, scan the news and read reliable financial websites to keep yourself updated.

Setting Aside Enough Funds:

Assess the capital you can risk losing. A day trader needs to have substantial savings and enough funds as a large amount of capital is often needed to trade efficiently. This will protect them if they actually make a loss in the market.

Discipline to Stick to Strategy:

It is possible that you would want to change strategies midway to make more profits but remember, there is a reason why you chose a strategy. Stocks change violently; hence changing strategies midway is just going to create chaos. Discipline yourself to stick to the strategy that works best for you till the end.

Realistic About Profits:

A strategy may not always work. You can’t win profit always. Excellent traders also only win 50 to 60% of the time. A smart strategy is to make more on winning stocks and lose less on loser stocks. Once you know you are bound to lose as well, you will make more realistic entry-exit strategies.

Giving this Enough Time:

Day trading needs a lot of time. You need to be vigilant till the market closes for the day. There is a chance that you may lose an opportunity just because you took a short break. There is no time to spare absolutely in the day, so you should be prepared for it if you consider it an option.

Knows to Choose the Right Brokerage:

A day trader definitely needs a brokerage as they access the market frequently and need the help of certain tools, such as trading platforms, to optimize for low costs. The brokerage offers several services along with such a high-end tool that can really help you trade efficiently. It could get tough to find the right brokerage for you, so comprehensively, go through this trading guide to find the right brokerage that fits your trading needs.

Can Keep Calm:

Not every day is going to be a good day for trading. You may see your stock value go down and would want to make an impulsive decision. Well, the thumb rule is you should have control over your nerves, or else you may make a bad decision. Also, be prepared to face some losses as you cannot always win.

The Bottom Line- Making a Living by Day Trading:

Though it sounds lucrative, day trading is a challenging field that should be left to skilled and resourceful traders. If you feel you have a knack for this field, start small and see if it is the right fit for you. If you follow the basics we have shared, there is a good chance that you will do well in this field.