Day Trading is a tough business. Just as quickly as the money may be made, it can be lost. Before you begin investing in stocks it is always a good idea to seek independent financial advice from a qualified stock broker. However, here are some free, quick & simple tips for people interested in becoming day traders:
Tip #1: Have knowledge of you chosen stocks/industries BEFORE investing in them.
You wouldn't buy a pizza before knowing the ingredients, so why should you buy stock in a company or certain industry sector without having knowledge of that companies day-to-day operations and the issues/opportunities affecting that particular investment? Tip #1 is simple. Don't invest without investigating!
Tip #2: Have the right research & investment software, before you begin.
To be successful as a day trader you need the best Day Trading Software. The morning newspaper and a phone aren't good enough, in this day and age, to suffice. You (obviously) need a decent PC to run the software and preferably an internet connection to browse the various investment/stockmarket related websites to get the latest breaking financial news. It is also important to remember that not everything you hear and read will be true. Free Stock Quotes can help you gauge the prices, however, this may not always be accurate information as stock prices rise and fall constantly. This is why you must review potential software before you choose to purchase it.
Tip #3: Understand that you may suffer large financial losses.
Obviously, where there is the opportunity to make money there is the very real threat that you may lose money. Do not invest money that you cannot afford to lose. Make sure you keep money for living expenses and never take out a second mortgage or use a student loan to fund your day trading. Day trading is high-risk by nature, so be responsible.
Tip #4: Beware of websites & newsletters that offer "hot tips" & "expert advice".
There are many websites and newsletters that claim they have "hot tips" & "expert advice". Do not believe anybody that claims they can make you easy money through day trading. You can never be sure their "hot tips" are unbiased and warranted.
Tip #5: Learn, Learn, Learn.
There are many educational resources (such as this site) that can help you learn more about day trading. Day Trading Books are a great place to start. They are usually written by people who are very knowledgeable in their chosen field and are worth the small investment.