Getting Started Day Trading Stocks
As some of you may already know, day trading stocks has earned itself quite a reputation over the years. It's popularity gains momentum during market extremes.
Looking back in history, Day Trading stocks started becoming popular when Internet access was made widely accessible to the public in the mid-late 1990's. It was the same time period that several online trading companies were launched for individual traders.
This type of trading involves buying and selling stocks with the intention of only holding positions for a single day. No positions are held overnight, otherwise it is not Day Trading. This is quite different compared to an investor, who buys a stock with the intention of holding the position for the long term and anticipates increasing value over time.
Compare this to people who are Scalping Stocks throughout the day: See this other page on Scalping Stocks and the chart below for comparison:
People Day Trading Stocks must be available during the day for extended periods of time. Since their time horizon is not very long, they often act on tips and strategies that require them to move in and out of trades quickly and sometimes without very much notice.
Some traders will place one or two trades each day, while others will place several trades each day on several stocks. There is no strict guideline or magic number as to how many trades each day works and how many doesn't work. It depends on your trading strategy.
Personally, I often trade once per day and there will be days I don't trade at all. You should know that it wasn't always like this though. I have traded many times per day, every day of the week before. If you have a lot of other things going on, making a lot of trades each day takes a lot out of you and becomes stressful to the point where it is unecessary and counter productive. At least that was the case with me.
As you gain experience, you may wind up finding out that you can place 10 trades each month and make the same as if you placed 100 trades per month. If so, then switch to the 10 trades per month and find something else to do with your free time, even if it's to continue learning and refining your strategy.
If you are interested in getting started Day Trading stocks, the first thing to understand is that this is not a "get rich quick" method of trading that never fails. In fact, most people who start using this method of trading do indeed fail.
One of the main reasons the failure rates are so high is because the majority of people starting out Day Trading stocks only have one thing in mind- to make a lot of money quickly and easily. This just doesn't happen. Sure you'll hear stories of large profits being made quickly, but that's because people feel good about telling others of their success. While large profits can be made, large losses occur as well. When it comes to the losing trades, most people close up and keep their stories of failure to themselves.
Just as people tell stories and feel good about the profitable trades, they also remember these profitable trades as well. The losing trades are not spoken about nor are they remembered. This is a big mistake.
An important part of learning how to be successful at trading stocks is to keep a record of, remember and study the losing trades. Analyzing the losing trades to see what went wrong and what you could have done to prevent or minimize the losing trade from happening again in the future, will determine whether or not you will be successful.
While doing any type of trading or investing, always remember that being successful will not be determined by whether or not you have losing trades, it will be determined by how you plan and react for the times you do have losing trades. Losing trades happen. Admit it and understand it and you'll be better off in the long run.