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Tips For Earning Money By Day Trading

Aug 17, 2007
Before you start investing your hard earned money, you need to really stop and assess your capabilities. Be aware that when you engage in any trading strategy your investment is always at stake. Don't gamble with your money - plan it out the smart way. Successful investors are successful for a reason. They strictly followed a trading system and stuck to it, regardless what was going on in the stock market.

Today, there are thousands of people who are doing quite well for themselves using day trading. Using profit making techniques, day traders buy and sell stocks. It's not that simple, of course, because you have to buy as well as sell at the same time.

The More You Know

Even if you don't have a background in trading, almost everyone can understand the basics. Buy low, sell high, follow trends, and protect your investments. More advanced traders will have full knowledge of the history of exchanges for that given stock and choose a proven stock picking strategy.

Trend Following

In a nutshell, day traders assume that if a particular stock is steadily rising it will continue to rise, and likewise, if a stock is falling it will continue to fall. This can be measured over a prolonged period of time. Thus, traders will purchase rising stocks and avoid falling ones. Don't worry about having to map up the trend lines on your own. Today there are lots of both free and paid software that are specifically designed for day traders. To find such software you can simply type "day trading software" into your favorite search engine.

Pay Attention To The News

The news has a very profound impact on stock trading. If a particular company has sent out a press release that they have invented a new technology or have acquired another company, its shares may surge. A great way to stay on top of the news for any particular company is subscribe to that companies RSS feed on Yahoo Finance, or to use the Google News Alerts (where you can get Google News to email you news based on certain keywords as it comes in).

Scalping

This is also called spread trading. Usually completed in 12 hours or less, small quantities of a given stock are purchased then the original buyer turns around and sells his shares for a miniscule higher amount than they were purchased for. Not anything to cry home about, but still a good, quick trade.

Covering Spread

This is a kind of leapfrogging of stocks. You buy stocks at the minimum bidding price and sell stocks at the so called asking price. At the end of the day, you will have the same amount of stocks, except that you will have stocks in a higher rated company.
About the Author
For more great day trading related articles and resources check out http://tradinginformer.info
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