In this mini-course, we will explain the basics of day trading the US stocks and equities markets as well as introduce some of the strategies a new trader can use to independently navigate this risky yet rewarding way of “investing” money.
First of all, day trading is by no means an easy task but at the same time, it is not as complicated as it may seem. While it doesn’t take a rocket scientist to be able to read a stock chart, traders have to be meticulous with the methodology that goes behind analyzing stocks.
So what is day trading?
Day trading is the act of buying and selling shares within a single day, with the aim of buying low and selling high or vice versa, ultimately trying to make incremental profits every day. Secure positions early, and throughout the day, closing them in the evening before the market day concludes. Though day trading in theory seems simple, a trader must be very diligent in maintaining composure. Thinking objectively, and systematically executing decisions to protect and grow their capital while in the market.
Many money managers and Wall Street professionals tend to stay away from day trading because they argue that the reward it brings does not justify the risk.
Day trading takes a short-term approach. Even though there is a lot of money to be made in it, holding positions for a short period of time is an entirely different ball game than long term investing and requires a different repertoire of skills. Not everyone can learn them as you will see in a minute. In fact, many people have lost their savings on day trading and because of this, trading is often seen as an evil. It is often synonymous with gambling and betting, but if you take the time to learn and appreciate the market, you will understand that day trading is vastly different from your traditional gambling.