When examining a potential stock, two criteria are all important when looking at intra-day performance: “liquidity” and “volatility.”

The liquidity of a stock is defined by its trading volume as well as its supply. This is influenced primarily by high levels of investor interest in the stock on a daily basis. These conditions minimize the chance of the spread, the difference between the asking price and the bid, widening and causing slippage. (Slippage occurs when market interest does not match the asking price, and can often cause a stock to become negatively volatile.)

Volatility is the expected range of trading on the intra-day scale. A greater volatility creates more opportunity for gain as well as for loss. Within these criteria, stocks can be traded for more significant gains on a daily level, while negative risk is minimized.

Examining and trading a stock that meets these requirements involves the use of a definitive strategy. Many different day trading strategies can be effective and lucrative simply due to the volatility of the daily market.

Scalping is a common practice that means buying into a stock and selling out of it immediately when it becomes profitable. This strategy minimizes gains, but more significantly, risk. This is often more difficult with less capital to invest, but not entirely out of the question.

Fading is a practice that bets against a stock when it has risen rapidly in value. Traders who fade stocks believe in the reactionary nature of the market, meaning if a stock changes rapidly in value; it will quickly be corrected to a more reasonable value.

Trending a stock is betting that the course of its movement will continue – if the value is falling, it will continue to fall, and if it is rising, it will continue to do so. This often bets that a stock’s range of trading will increase, rather than remain stagnantly in a set trading range. This strategy can be the most potentially lucrative for smaller scale investors.

Channeling a stock is betting that the range of its value will stay in relatively the same position over the course of the day. This entails buying at the lower end of a stock’s range and selling at the peaks over the course of the day.

What makes day trading exciting for many investors is that all of these strategies can secure significant gains as well as significant losses. The best day traders have a strong feel of the market, being able to sense when a stock is reaching a relative maximum or minimum within its range. When considering entering the intra-day market, it is advisable to watch particular stocks and practice without risking money.

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One of the direct advantages of selling and buying during one day is that no day trader has to sleep bad because they worry about their positions. They already know the result of the passed day. The problem with futures is that they will often open with a completely different price than they closed with the day before. This may lead to severe losses while holding a position over night.

A normal day trader make a couple of trades during one day. This should be compared to a “normal” trader, that might be doing about one trade every week. Due to the higher tempo when day trading, the day trader is also going to learn more about trading or getting more trading experience since he is doing it more than a normal trader.

The hardest part about day trading is that you have to be very disciplined to succeed. It is very easy to overtrade. The commission is another problem, the commission is calculated per trade and since a day trader do quite a lot of trades during a day, the commission is going to be high. Many day traders have been shaken through the extremely high commissions they had to pay. They were happy that they reached break even at the end of the year and when the commission had to be paid, they suddenly realize they are actually losing money.

It is a fact that the most day traders don’t make it. They start enthusiastically, but unprepared. This leads to bad decisions at the start and this leads directly to losses. It doesn’t take long before they have lost everything they own.

Therefore, it is very important to have a strategy when starting day trading futures. And you have to be disciplined. Otherwise you will have no chance on this highly competitive market.

To learn about day trading you could start doing it on normal stocks. Try to find a few good stocks to buy now and learn as much as you can. Day trading for a living is a very hard thing to succeed with.

You could also try the forex market, if you do some research you will probably find out about the forex trading secrets and if you are clever you can use them to your advantage.

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A day trader is a person who makes short term trading. Normally he will buy and sell a position within one day. It is not necessary that the stock prices rise that much during the day to make a substantial profit. If, for example, stocks for 10.000 USD are bought and sold for 10.300 USD, the profit is 300 USD. That is quite a profit for one day of trading.

When day trading it is important that you try to reduce your risk, or at least reduce it to a level that you can manage. As you have already seen, it is not important to get a high price increase to make profit. But you have also seen that a small change in the price can make a huge difference for your profit. It is important to remember that it is even easier to lose money than to gain it.

I have choosen five books that will give you all information you need to start day trading. If you follow the advices in those books you will definitely have reduced your risk and you will know about strategies for maximizing your profits. You will also have learned basic techniques of day trading.

This book is a perfect guide for beginners in day trading. It explains the basic concepts and gives a straight forward step-by-step manner introduction to day trading.

The Dummies series is a well know series of books for newcomers into different themes. This one covers day trading. It will teach you how to set up a trading account, how to plan and research your trades, how to evaluate your trading performance, technical and fundamental analysis, how to find entry and exit points and tactics for short term trading.

Mastering the trade will teach you in a step-by-step manner how to get from newbie day trader to master day trader. It will teach you about exact entry, exit and stop loss levels for intraday trading. You will also learn about risk control and the psychology of trading.

Trend trading for a living will teach you the basics of daytrading and of trading the stock market. You will learn to use options to reduce your risk or to increase your profit. You will also learn how to transform into a pro trader.

The book Tools and Tactics for the Master Day Trader will teach you what you need to know to become a master day trader. This is a book for a little bit more advanced traders. It will teach you about Stop-Techniques, Moving averages and other technical methods, market timing and a lot of other things that will help you becoming a master day trader.

If you read those books and learn what they are telling you, you will be securely on a way to day trading for a living and you will have learned a lot about forex trading strategies.

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