How to Day Trade Stocks
A trader who wants to try and profit from short-term stock price movements can open up an account to day trade. The trader will also need a charting package to use to pick different stocks. Deciding on a methodology to use will help the trader know when to buy and sell a stock.
- Set up your trading computer before you start to day trade. Use a computer that has a fast Internet connection so your trade orders will not be delayed after you place them. If you are day trading from home, it is a good idea to use a separate computer instead of trading from one that you use for surfing the Web.
- Choose a broker to use for day trading stocks. Find a broker that has low commissions to help you reduce your trade costs. Open up your account with at least $25,000, which is the minimum amount you are allowed to use for day trading. Download the broker’s software and learn how to buy and sell stocks on the platform.
- Set up a charting program to help you pick stocks to day trade. Do some research to find a good program to use. There are some brokers that will provide free data to use with certain charting programs which will save you some money.
- Decide on the best day trading methodology to use. For example, you may want to buy stocks that are making new daily highs. You also need to determine the profit target for each stock as well as the maximum loss you are willing to take if the trade goes against you.
- Pick the stocks that you want to day trade. Find stocks that have high daily volume instead of trading a stock that is not as popular. Use a financial website to help you pick the right stocks to day trade.