Stock Day Trading

Stock Day Trading

Stock day Trading is simply trading that is done within the daytime market hours of a particular stock.

Day trading starts at the open at the earliest and ends at the close at the latest. A day trade can be only 5 minutes long or it may take the entire day.

Day trading became popular for a number of reasons. One of the biggest reasons was that the day trader always closed his position out at the end of the day. Thus many day traders could sleep peacefully at night.

Another reason day trading became so popular was that during the dotcom boom many stocks made huge moves during the day. It was not uncommon to see certain stocks move 20-40 points or more on some days.

The huge intraday moves are what the day trader lives for. The larger the intraday move the greater potential profit is available to the daytrader.

It seemed perfectly logical that if you can make a huge return on a stock by day trading why risk holding your positions past the close of the market.

Day trading is absolutely not for everyone. Day trading, like all trading requires discipline for you to be profitable. You may have seen the bad press about day trading over the years. You have probably even seen vendors advertise that their stock trading system is “not day trading”.

One of the reasons for this bad press is that many day traders lost a lot of money by just jumping into the markets to participate in what we now call “emotional exuberance”

Day trading spread like wildfire and some people even quit their day jobs to embrace what they though to be the day trader's lifestyle.

Traders used greater than normal leverage and less than normal discipline. This was and still is a very dangerous combination.

So do some day traders trade profitably? The answer is yes. Do most day traders profit? The answer is no. What's the difference? The are a number of differences.

The factors that make some daytraders successful are the same factors that make some non-daytraders successful. These factors include but are not limited to having a trading plan, adequate working capital, discipline, etc.