How to be a successful Day Trader
posted July 24, 2009 - 9:24pm
Some people are always ask for stock tips without having their own unique trading system. They also don't know that investing without rules is like throwing darts or gambling. There are strategies can be used to profit from the market on a regular basis. We just need to find our own paths to beat the market.
Step 1
Better to have at least $25,000 to become a pattern day trader (4x buying power). Stock market is risky. Please do only trade what you afford to lose.
If you make four or more day trades in a rolling five-trading-day period, you will be considered a pattern day trader no matter you have $25,000 or not. If your account equity falls below $25,000, a day trading minimum equity call will be issued on your account requiring you to deposit additional funds or securities.
Step 2
Open a stock brokerage margin account:
TradeKing
Etrade
TD Ameritrade
Step 3
Learn how to read candlestick chart and its pattern.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis
Technical analysis is the soul of day trading. Please take time to get familiar with all the tools you can use. Basically, you will just need to know simple average lines: 20 day and 50 day moving average line, MACD, RSI, and Volume.
Step 4
Rules to follow:
1)Everyone makes mistakes, cut loss early if you make a mistake.
2)After enter into a trade, do not buy more, just watch it rise and sell if you are happy with profit or hold it for 5 to 25 min. If you add more positon, bad thing would happen. Day trading is just like a thief stealing money from the stock market quick and once at a time, if you go back to steal more, they will catch you.
3)Day trading means quick profit, do not hold stock for more than 25 min. You can always sell with profit if it starts to fall from top, and then buy it back later if it turn out going upward again.
Step 5
You should develop your own system of day trading. Because each of us has different personality and a particular trading strategy might not fit for everyone. Happy trading and never stop learning!
Here is my blog that you can visit:
http://surewinstock.blogspot.com/
Resources
Sure-win Stock Trading
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