Hot Stock Tips For Beginners #12 !! Stocks Ready To Explode

Day Trading has become more popular again in the past 5 years and it has a lot to do with the volatility in the stock market

. The slow and steady rise in the stock market in the 80s and 90s has drastically changed to a market that can move up and down like a roller coaster in an instant. The increase in volatility can be attributed to technology as nowadays people get access to information much quicker and therefore, people are able to react to good or bad news faster. This presents an opportunity for people who are actively trading the stock market on a short term basis.

Since the worldwide recession started in 2008, many people lost their jobs and were forced to create their own jobs or become self employed because they couldnt find any suitable jobs. Many people looked at trying to make money in the stock market on a daily basis by becoming day traders. For those who dont know, Day traders are people who buy and sell any financial instrument within the same trading day and all their positions are closed before the market closes each day. You may have guessed that a lot of these day traders lost money and you were right. Many people perceive day trading as a path to wealth and the lifestyle of financial freedom. However, this competitive game of day trading is extremely risky and the odds are against you in favor of failure. In fact, there are studies out there that show that over 70% of day traders lose money in their first year of trading. However, for those who are comfortable with this type of environment it can be a very profitable and rewarding venture. Let me share with you my experiences as a day trader and how you can become the other 30% who succeed as day traders.

The first and most important lesson you should follow is to first find a mentor who has been successfully trading the stock market for a long time so he/she can guide you in the right direction. You can try to learn the stock market on your own but I can guarantee that you will end up losing a lot of money due to your inexperience or lack of knowledge. A mentor can tell you what mistakes he has made and the ways that he has made money in the past. If you can find a good mentor, this will save you a lot of money and headache.

Another important lesson is to practice your day trading techniques and strategies with a demo or simulated trading account first. These accounts will not use your real money and it will tell you if you are ready to become a day trader. If you are not making money on a demo account, you will probably not make money on a live account with your real money.

The third lesson is to only trade with money that you can afford to lose and not affect your daily lifestyle. If you are trading with money that you need to pay your monthly bills with then you are guaranteed to fail. The reason is there is no guarantee of profits when you are day trading. Some days you will lose money and some days you will make money.

The forth lesson is before you day trade each day, decide how much you are willing to risk and stick to it. If your day trading activities reach your target loss for the day then stop trading for that day and shut off your computer. This keeps your losses in control and you live to trade another day.

Lastly, have a day trading plan in place before you trade each day. Know exactly what stock you are trading, the entry and exit price and more importantly, what price you will get out if your trade doesnt work out. If you have a plan every day then you increase your probability of success.

Day trading is not easy and it takes a lot of hard work. Take your time to learn about the day trading business to see if it is the right fit for you.

by: Online Trading Coach

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