What is day trading?

What is Day Trading

Day trading is trading methodology in which an financial instrument is is bought and sold on dame day. In this by the end of day all positions are squared off. In this methodology if trader buy the stock in beginning of day then by the close of trading session trader will be selling that position and vice versa if trader short sell a position in beginning of session then by the end of session he will be squaring off the position by buying back the position.

Once trader becomes proficient in his game he can do this buy-sell or sell-buy cycle many times per session as and when opportunity arises.

Requirement of Day Trading

1: Good understanding of market dynamics like support and resistance

2: High concentration and good experience in taking decisions without involving fear and greed.

3: Good computer system preferably more than 1 monitor.

4: Broadband connection and live market feed. A backup dial-up internet connection will also be good

5: Back-up power supply in form of UPS or generator.

6: Direct trading desk number if by chance everything fails you still be able to call then to square off the positions

7: Always put stop loss point in system so if something bad happen to you and position start going against so still your capital be protected.

8: Enough capitalization to be able to sustain consecutive draw downs

9: Statistically backed trading methodology over number of years of sample data.

Day trading is highly rewarding but very risky endeavor. One should start day trading after having good experience in swing trading or position trading.

Nasdaq100 and Forex are good market to day-trade as they have good liquidity good daily range.