Learn how to day trade online with our trading of the day for dummy guide. There are six things every beginner should know before starting to trade stocks. Everything you need to know about day trading will be revealed through this day trading for beginners guide.

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In this day trading guide we will give you six day trading tips that will teach you how to day trade stocks. Day trading is a legitimate career that can free you from the regular 9 to 5 job.

 

We created this day trade for a dummy guide so you can avoid the most common mistakes new traders tend to make.

We’ll dive into the basics of trading, plus more advanced strategies.

So you want to learn how to day trade? Let’s start by answering the first basic question:  What is day trading?

See below:

What is day trading?

 

Day trading is the act of buying and selling a financial instrument during one trading day.

Whenever you open a trade with the intention of taking advantage of the small intraday price movements and close it on the same trading day, you enter the day trade.

Pretty simple isn’t it? The only thing you have to remember is that if you close your position before the market closes, you are a day trader.

Example: If you buy and sell Bitcoin in a trading day, you are trading Bitcoin. Many successful traders use day trading strategies as opposed to long term trading strategies. They are considered one of the best ways to get rich quick. But, we must also remember the terrible risks that come with day trading.

Deciding which trading style is better, day trading or long-term investing is not just about your personal preference. There are several key factors, like mental discipline, your ability to act under pressure. It’s important to remember that you can still fail if you don’t have the right strategy.

You may be asking yourself, should I day trade? In the next section, we will cover the core traits you need to be a successful day trader.

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Who should day trade?

Wondering if you should day trade? The way to make a profit in any market (stocks, forex, commodities, cryptocurrencies) is to find a trading style that suits your personality. Some people have a natural skill set better suited to day trading than others.

Becoming a successful day trader requires more than just a good day trading strategy. You must also have:

  • Mental discipline.
  • The ability to think quickly.
  • Ability to work under great pressure.

If your personality doesn’t match your trading style, you may find yourself in a risky situation. For example, if your trading style is to move at a slower pace, you may not be suitable for day trading. You will be better suited to swing trading . Basically, you need to understand your trading timeframe personality.

Veteran trading psychologist and bestselling author Brett Steenbarger discovered that successful trading means focusing on your personality strengths.

One thing to remember is that day trading also has regulatory ramifications. FINRA will only allow you to participate in this type of trading if you have at least $25,000 in your account. This is also known as the  PDT rule (Sample Day Trading).

So should you try day trading?

If you have more than $25,000 in your account and perform well under pressure, day trading is a good option. It depends on your trading personality, risk tolerance and financial liquidity.

If you’re lucky, you fill out all the requirements outlined in this section. You are one step closer to making a career as a day trader. Now, you need to learn how to day trade. For those of you who don’t meet the requirements or don’t want to risk retirement or savings, you can always use the social trading platform to copy a professional trader.

 

 

Why trading day? – Benefits of day trading

 

 

So what are the benefits of day trading?

  • There is no overnight risk of holding stocks.
  • You can make money both when the stock price goes up and when the stock price goes down.
  • You can use an additional margin. Leverage and quick market entry and exit make day trading stocks alluring.
  • You don’t have to do detailed research into the company’s fundamentals. You are just speculating on daily price movements.
  • You can make money fast compared to long term trading.

These are just a few of the advantages that day trading offers. This will motivate you why day trading is a good approach to trading the financial markets. You may also be interested in our guide to ETF trading dates .

Next, we need to learn how to trade stocks in a way that will give you consistency.

If you are interested in day trading for a living, this 3-step process will teach you how to trade stocks successfully.

See below:

How do stocks day trade?

 

Learning how to day trade involves more than just picking the best day trading stocks. It requires a system of planning, practice, and patience. Here are some core principles you need to follow when you start day trading. Based on the Rule of Three Threes:

  • Make a Plan – You need to develop your own winning day trading plan, otherwise you are planning to fail. It is important to have a personal map for your trades as there are many storms you may encounter while trading.
  • Practice – An essential part of your trading toolkit should be to practice your strategy until you master the day trading game. After all, repetition is the mother of all learning.
  • Patience – Once you are ready for your trading plan, stick to your rules patiently.

You need to know when to day trade, what time of day to trade, what day trading stocks are best to deal with, and what day trading strategies to use.

If you can master the art of being patient and following your day trading rules, it can be a real game changer for your trading.

If you really want to improve your success rate and further optimize your strategy, you need to know the best times to day trade.

See below:

When is the best time to day trade?

 

 

So what is the best time to day trade? The best times to day trade are during the first and last regular market trading hours, between 9:30 – 10:30 EST EST and 3:00 – 4:00 PM EST.

The stock market tends to produce most of its price movements during specific times of the day.

It is well documented that the stock market is most volatile during the first hour of the trading day (9:30 – 10:30 AM EST) and the last hour of regular market trading (3:00 – 4:00 PM EST). They are often referred to by experts as hourly strength stocks.

Day trading strategies cannot exist without volatility. Volatility is the life and breath of any successful trader.

Now you have the mindset of a calculated sniper ready to patiently wait for the best trading opportunity.

One more thing to complete your day trading education. If you want to take your game to the next level and approach day trading the right way, you’ll need to learn how to trade stocks using charts.

 

 

Day Trading Strategy – Price Action and Chart Patterns

 

 

Day trading strategies typically rely on two types of stock analysis: fundamental and technical analysis.

To find potential day trading opportunities, you need to focus on chart-based technical analysis. You just need to have a good price action pattern repeating every day to be successful as a day trader.

Our team at Trading Strategies Guide has put together the most comprehensive guides to various day trading chart pattern strategies. To understand the psychology of a chart pattern, please start here: A Step by Step Guide to Chart Pattern Trading Strategy.

If your favorite stock tends to produce the same pattern over time, chances are that the stock will continue to follow the same pattern it did in the past. That’s why we recommend studying historical stock charts to find repeating patterns.

When you look for an intraday trading pattern just look for clean and easy price action.

If you are having trouble determining if there is a pattern on a stock chart, chances are this is not a tradable stock pattern. You need to look for predictable and reliable stock chart patterns to be a successful day trader.

For example, breakouts that occur during the first hour of regular trading hours and are accompanied by increased volume, have a very high probability to see a follow. The best way to break the daily trade is to wait for a close above the resistance level. You’ll also want to see a close below support before you go short.

See the stock chart below:

 

 

The day trading breakout is an easy and obvious pattern that takes advantage of the volatility created by the breakout of these key levels. This is a good method to learn how to trade stocks and grow your account.

Also, be sure to read this article on the  best day exchanges .

Final Words – Day Trading

Day trading requires intense concentration. If you learn how to trade daily properly, you can achieve financial independence. When you create a profitable trading plan, you will be able to spot repetitive and profitable stock chart patterns. If you need help, you can do all of the above through the very popular trading and trading strategies resources here on the TSG website.

Before you develop your own day trading strategies, make sure you have each of the points mentioned in this article before you risk any of your hard earned money. With the S&P 500 hitting new all-time highs nearly every day, there has never been a better time to start trading stocks for a living.

Finally, we hope that today’s trading for dummies guide will help you get started in the stock market.