Day Trading

Start by knowing what you're getting into: risk tolerance, goals, capital, as well as time and effort involved. Practice using a simulator, and start small. Research and pick a brokerage platform and set up an account. Create your trading plan, which you will review and edit at the beginning of each day as you create your watchlist for that day. Follow your plan and review your trades at the end of the day.

Day trading is neither illegal nor unethical. However, it is extremely complex and should only be tackled by experienced professionals. Most traders do not have the time, money, or knowledge required to sustain the discipline required to be successful.

The financial media has widely speculated that 95% of day traders lose money, and many of that 95% continue to trade for a time despite being unprofitable. Those who do make money, succeed at predicting a stock's movements through rigorous research and a pinch of luck from time to time.

Forex trading (foreign currency trading) can follow the same time frames as day trading, meaning it can be done in short bursts on a daily basis. But trading sessions for stocks are limited to exchange hours, generally 9:30 a.m. to 4 p.m. EST, Monday through Friday with the exception of market holidays. The forex market, on the other hand, remains active round-the-clock from 5 p.m. Sunday, through 5 p.m. EST Friday.

Day trading can closely resemble gambling. For instance, when you place a day trade, you're betting that the price movements of a particular stock will go in a particular direction in the short term. If a person trades only for the emotional rush of winning and without the logical detachment offered by rigorous research, they are likely gambling. Traders driven by emotion may fail to recognize a losing bet and exit their positions.