Guide to Day trading

This depends on what you want to day trade. Despite all of the disadvantages, some people want to day trade stocks. Due to restrictive regulations, stock day trading requires an account size of at least $25,000. In reality, you need at least $30,000 to day trade stocks (preferably more). To day trade currencies, you can start with as little as a few hundred bucks. This has only been possible since the late nineties, when the foreign exchange market was opened to the individual (retail) investor. For new day traders that only have a few hundred dollars to risk in day trading, a forex account is a great option. If you want to learn more about day trading currencies, go to the currency trading section of this website.

Should I paper trade on paper?

No! Paper trading should be made as realistic as possible without the use of real money. Paper trading by writing down the prices you would have bought or sold is not the same as using a day trading simulator that uses actual market prices and lifelike executions. A day trader's learning curve improves immensely when he uses a lifelike software program that does not use real money.

What can a day trading software cost me?

The price of day trading software can vary greatly. Make sure that the software that you use for day trading provides charting as well as order execution build into the platform.

Is it a good idea to use trading systems or daytrading entry/exit point generated by trading systems' websites?

Let me answer a question with a question. Do you want to learn how to become a day trader or do you want to be an order taker? When you rely on entry and exit signals from a program or a company, you are simply taking orders - you are not learning how to determine where to get in and where to get out yourself. You are not evolving as a trader. Why do people so desperately look for trading signals then? Because they want to have their cake and eat it too. Many of these signal lovers want to be told what to do, but also want to feel in control. Placing the orders makes them feel like traders, but the day trading signals give them a fake sense of security - since they are acting on "professional" or "privileged" information. When you are day trading, you need to react on information in an instant. When you are waiting for a signal before buying or selling, there is a reaction delay that can cause you to leave some money on the table. Furthermore, if the daytrading signals you are relying on are so great, why doesn't the company that sells them to you offer them as an automated package? Why would the signal company reduce the effectiveness of the signals by allowing you to press the trigger and possibly mess everything up? It's silly. Don't rely on signals for daytrading. Learn how to trade. There is no other way.

I have invested in stocks in the past. Will day trading be easier for me to learn?

Will day trading be easier for me to learn? Probably. If you are already familiar with the types of orders used to buy and sell stocks (market, limit and stop order) and basic concepts like bid and ask, you can jump right into other more advanced day trading concepts. Given the fact that trading currencies is a lot simpler than trading stocks stocks (since there are only a handful of currencies to trade), a stock investor can quickly make the transition from equities to forex. Now, don't misinterpret what we are saying here. You don't have to be an expert in any type of market to learn how to day trade. We believe that with dedication and practice anyone can learn day trading.

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