Day Trading Tips for Beginners:Sure Ways to Day Trade Profitably.

Intraday trading techniques-Day trading tips for beginners
Intraday trading techniques-Day trading tips for beginners | Source

Day trading tips for beginners

I have in this post given few simple but vital day trading tips for beginners, which if followed seriously, any first timer can carryout day trading profitably within a short time. If you, as a beginner, wish to take the time to learn intraday trading techniques to make money safely from stocks then you have probably hit upon the right article.

Can you make money day trading as a beginner?

Day trading is believed to be quite difficult and unsafe in absence of knowledge of the basics. You may be excited about the prospect of making quick money from day trading in stocks, you should also keep in mind that there is every chance of losing money fast unless you learn the proven intraday trading techniques before taking a plunge in the big race. I am sure, the day trading tips and strategies discussed in this post, would go a long way to make online day trading safer for you as a beginner and initiate you into the profitable venture of day trade in stocks with confidence. Day trading may be extremely challenging and exciting but just like all games of risk it is imperative that you, as a beginner, know the techniques of the game when it comes to winning and making instant money from trading in stocks.

Any guide on day trading for beginners has to answer the questions - what exactly one should know to get started, where to trade and when to stop and what are the rules and strategies of the game. In the following paragraphs I am going to share few basic day trading tips for beginners, which if followed judiciously, I am sure any first timer can easily learn to day trade safely and his online trading experience would be interesting and enjoyable and profitable.

Day trading in stocks- prospect of success for beginners

You must have heard about thousands of small investors like petite businessmen, retired persons, salaried executives, teachers, even students making fortune every day in stock market through online day trading from the changing stock prices from minute to minute, using their personal computers. As a beginner you too can learn to day trade successfully and make a fortune for which you have to know the stock market's state-of-the-art intraday trading techniques and to follow few basic day trading tips and strategies discussed in this post. The single most important factor that needs attention is to have the discipline to repeat a proven strategy, consistently. Day trading stocks is actually a business with high risk as well as with great rewards that requires a great deal of research, time, and discipline to carry it out successfully. The tips given in this guide on day trading for beginners is actually meant for fulfilling these objectives.

Why day trading is exciting?

It's no secret that investment in stocks is not only the best bet against inflation; it also gives an investor the opportunity to earn phenomenal returns in the long term. However, compared with such normal stock investing, online day trading in stocks is more exciting and is a great way of making a fortune quickly without remaining invested in the market for long, provided you play the game right according to the day trading strategy explained in this guide for the beginners. One of the fundamental points of intra-day trading is that there should be no long-term holding of stocks as in case of normal stock investment. In day trading, you just focus on 1 or 2 stocks that you buy in the morning when the stock market opens and sell them before closing of the trading session, making a neat profit from the trade. Your main attraction as a buyer in intra-day trading in stocks is the immediate satisfaction it offers you, since you can factually see your money growing as the stock price goes up.

What should beginners learn to day trade safely?

While day trading stocks can be a great way to make money if you play the game according to the rules and follow a disciplined approach as explained here, it can also be an easy way to lose money if you start thinking out of box or look at it as some form of gambling where you depend too much on Lady Luck. A common mistake of the beginners is to go for over trading by placing too many trades during the course of the trading day in a frantic attempt to get back their money lost in trade. For a disciplined approach the correct attitude in such situation should usually be to take a break after a series of losing trades. The most essential thing for beginners to carryout day trading is to equip themselves with all information like stock splits, dividends, bonus announcements etc. in respect of the specific stocks singled out by them for special watch. The good side about online trading in stocks is that you can play in the market both as a bull as well as a bear. Although most of the time a day trader plays on the upside of the market he can also gain from the downside by selling shares and squaring the sale transactions well before closing of the market.

Who should go for day trading stocks?

Now the question is who should go for such trading? Regrettably, it has been observed that the temptation of making quick money has drawn many people in online day trading who should not have otherwise gone into it. The most important advice about day trading for beginners is that they should not go in for day trading in stocks, which is a high-risk arena, unless they learn in advance to day trade safely by acquiring good knowledge about the basic intraday trading techniques and strategy and also can give sufficient time and full attention to his stock holding. This would enable him to track the market online closely so that he does not miss out on opportunities during the trading session. Day trading is, therefore, not advisable for someone who has a busy profession and cannot devote sufficient time to monitor the market from morning till the end of the trading session. Another important advice for a first timer intending to go for online day trading in stocks is that, he should have the right temperament to keep all sorts of emotions like over confidence, fear, hope or greed at bay. It is imperative that you should carry out online day trading on the basis of data available on your computer screen only and not based on any personal emotions. A would-be day trader should also try a simulation exercise to practice and test his trading abilities before taking the plunge into this high risk arena. For this, one can checkout the free website, which facilitates creation of a virtual portfolio and allows a beginner to carryout experiment in day trading in stocks by playing the virtual game.

Day trading tips and strategies for beginners
Day trading tips and strategies for beginners | Source

Day trading tips for beginners

As a guide for day trading for beginners let me give here 16 most crucial tips, which would enable a first timer to learn to day trade in stocks profitably and with minimum risk. The safe proven intraday trading techniques mentioned below are the outcome of personal experience of a professional day trader and a seasoned investor in Indian Stock Market.

  1. Devote your time to online day trading from opening till closing of the market;
  2. Equip yourself with latest reports and technical data of 8-10 stocks on your day trading watch list;
  3. For day trading in stocks invest your available surplus fund only, which you can afford to lose. Decide in advance how much loss you are prepared to tolerate on any trade;
  4. Choose only highly liquid index-based large cap shares for intra-day trading so that you do not end up holding the stocks that have no buyers at the end of the trading day;
  5. Do not invest in penny stocks which have low liquidity;
  6. Do not trade in more than 2 stocks at a time so that you can monitor movements of your stocks online closely;
  7. While buying stocks for trade fix the entry and target prices beforehand so that you do not miss the opportunity to maximize gain from the market upside;
  8. Use stop loss trigger facility to curtail your losses if the prices of your stocks in trade move beyond a limit specified by you;
  9. Do not convert a stock under intra-day transaction into a long-term holding instead of squaring the same at the end of the day, which may be a costly mistake;
  10. For stock that is rising and falling, buy near low price range and sell as it hits the high price range;
  11. Sell and book profits every time the stocks reach their target levels prefixed by you. If required you can always buy back the shares again at lower price levels;
  12. While normal stock investment may yield phenomenal returns in the long-term, try to be content with comparatively small gains from intra-day trading, which, after all, may not be bad for a single day’s work;
  13. Follow the strategy that assumes that the stocks that having been rising steadily will continue to rise;
  14. Buy stock in a company which has just announced good news;
  15. Allocate not more than 10-15% of your total stock portfolio to online day trading;
  16. Do not go for 'revenge trading' or over-trade in a frantic attempt to make up for the losses in case of successive losing trades. It usually results in loss of even more money. Instead, take a break in such situation;
  17. Review and analyze your trading results constantly to see which trades are working for you and modify trades accordingly;
  18. Interact with other day traders and build a useful network with them to exchange new trading ideas. Twitter is a great place to do this;

Conclusion

Day trading for beginners may be one of the most thrilling and rewarding activities that they ever have undertaken provided all their trades are properly researched by them. This of course is true only when they have taken the pain to learn the basic day trading techniques discussed in this article for carryout trading profitably and with minimum risk. A good understanding of the day trading tips given above will provide a first timer the foundation that will enable efficient learning of more advanced topics on various aspects of day trade which would eventually lead to development of his essential day trading skills.

Readers may also enjoy reading my other articles on stock market trading:

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Comments 13 comments

Share Trading 5 years ago

Very nice and genuine tips. My personal believe is that Day Trading can be extremely dangerous. It can incur huge loss in few minutes. Investors must be extra careful when doing day trading.


J Burgraff profile image

J Burgraff 5 years ago

I would offer the opinion that day-trading is not to be entered into lightly. It's very, very hard work and requires just as much effort as any other job...in fact it needs to be your job and not just a hobby. Ten to fifteen percent of your total portfolio is probably too much for any novice. I would hate to have anyone think that it's an easy way to make money.


radharenu profile image

radharenu 5 years ago from India Author

Hi, Burgraff

I fully agree with your comments. As I have mentioned in my post that one should not go in for intra-day trading, which is a high-risk arena, unless he can give sufficient time. It is not advisable for someone who has a busy profession and cannot devote enough time to monitor the market from morning till the end of the trading session.


funkystock profile image

funkystock 5 years ago

Good article. Excellent tips for someone that is new in the arena of day trading. Unfortunately with inconsistent long nature of the market day trading and options trading has not only become prevalent but important to secure gains. You can no longer invest in index funds etc. that follow the market and hope to win. Just doesn't work anymore.


radharenu profile image

radharenu 5 years ago from India Author

Hi Funky,

Thanks for your comments.I also agree with your well thought out views on the subject.


zakir hussain 4 years ago

Day Trading Basics for Beginners


monicamelendez profile image

monicamelendez 4 years ago from Salt Lake City

I got into day trading for a while. The biggest reason I stopped was a strange one. I got tired of the hassle during tax time. Preparing taxes as a day trader is seriously ridiculous!


radharenu profile image

radharenu 4 years ago from India Author

Hi, Monica

Thanks for the comment. I fully agree that unless you have sufficient time to monitor the market throughout the day it is not possible to successfully carryout intra-day trading, which is a high-risk arena.


TycoonSam profile image

TycoonSam 4 years ago from Washington, MI

I've been Day Trading for 4 years and I can tell you from experience that the highs of making money quickly are euphoric and the lows of losing money are emotionally draining. The advice I would give to a new Day Trader is Don't do it unless you have the Discipline of a Monk. Set your Stops like mentioned in the article and TAKE THEM.


radharenu profile image

radharenu 4 years ago from India Author

Hi Tycoon

Thanks for your valued advice for the aspiring day-traders. I am in full agreement with your observations.


Hackslap profile image

Hackslap 3 years ago from Sydney, Australia

This is a great set of tips and advice for anyone who wants to play the markets. .. voted up!


radharenu profile image

radharenu 3 years ago from India Author

Hi Hackslap

Thanks for stopping by and for your comments.


beginnertraders 3 years ago

Personally I managed to diversify my approach to making money on the side, which helped me generate extra income for my other businesses be it work from home, online business or as an aside to my day job. I found out about online options trading which is a very simple approach once you get a grasp of the key things to look out for in a trade. I started this at http://ads.anyoption.com/redirect.aspx?pid=2324937... where I started with a demo account so I was clearer of what I was doing as I was a beginner to this.

I found that obtaining knowledge really helped and these pages at http://hubpages.com/money/Online-Trading-Advice... helped me the most in learning how to effectively place a good trade, and since then I have been doing this when I can, probably about 10 minutes of my day and doubling my money. Just be sure that you exercise good judgement and where you are not sure better off not going in on that trade. I found this very simple to do as a beginner with no previous knowledge.

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