I’d Like to Try Day Trading. Any Advice To Learn How?

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When starting out, we suggest simplicity. Simplicity makes it easier to learn and harder to make costly mistakes.

  1. You're not thinking Day Trading. You're thinking Swing Trading.  What most people might think is day trading is actually more swing trading.  Pure day traders buy and sell while the market is open, and don't own anything by the end of the day.  This requires fast decisions based on lots of detailed planning and knowing your strategy.  Starting out, you should take things slower.  You still can buy or sell during the day, but prepare to own the stock for a few days to a few weeks.  That's swing trading.  It will give you more time to decide.  This also means you should buy or sell smaller amounts to limit your risk.
  2. Trade the Indexes with ETFs. The Indexes are the "market averages" that's shown at the top of every financial channel and website:
    S&P500 - symbol SPY
    Nasdaq 100 - QQQ
    Dow Jones - DIA
    Russell2000 smallcaps - IWM
    ETFs are Exchange Trade Funds that allow you to buy or sell a index as a whole.  This way you don't need to spend tons of hours evaluating individual companies and industries. Overinformation and confusion is one of the most dangerous obstacles for a new investor or trader.
  3. Learn basics of technical analysis, which simply focuses on the stock or ETF's prices and volume on stock charts.  Short-term stock price moves, which is what swing traders and day traders profit from, works best with technical analysis than fundamental analysis (analyzing companies). Company news take a long time to fully reflect in the stock price, and thus fundamental analysis is a bigger focus for investors, not traders.
  4. Proper use of basic technical analysis can help you find low risk points to buy, show you points where you should cut your losses, and general areas to take profits. If you cannot profitably trade one of the indexes with technical analysis, you are not ready to trade individual stocks. Individual stocks are a lot more at risk to random pieces of news or what other giant investors are doing.  For example, just a big mutual fund buying or dumping the stock would move a stock several percent and possibly cause more losses than you can handle.
  5. Know what news to focus on. When reading the news (more fundamental analysis), focus on economic news when just trading the indexes as mentioned above. For individual stocks, you'll have to do more homework. Read economic news as well as company news, the company's competitor, and industry news.

Resources for Learning and Trading

For resources to help you learn and get started, we've listed a ton of investing resources here.  Read books to get a sense of the basics, but also find a chatroom or trading coach to learn how to apply your new learned skills.

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Market Merchandise: Common Stock, Stock,
Players: Trader,
Styles: Trading, Active Investing, Swing Trading,
Strategies: Directional,
Skills: Technical Analysis, Risk Management, Fundamentals,

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