What is Day trading?
The buying and selling of the stocks within the same day are called day trading. In day trading, stocks are purchased, not with the intention to invest. However, for the purpose of earning profits by harnessing the movement of stock indices. Hence, you may earn profits from the fluctuations in the prices of the stocks in the day trading.
What is needed to be a day trader?
For the purpose of intraday trading, an online trading account is needed. You must specify that the orders are specific to intraday trading while doing intraday trading. Since, as mentioned earlier that the orders are squared off before the end of the trading day, hence, it is called as Intraday Trading.
Why is it risky?
This type of trading is riskier than investing in the regular stock market. You must understand the basics of such trading in order to avoid huge losses. This suggestion is especially for beginners. All the investors are advised to invest only that much of amount, which they can afford to lose without facing financial difficulties. Some of the intraday trading tips will help you in making profits. While you are booking profits in intraday trading, it is recommended to do a good research before you move further. Thus, you must follow certain technical indicators that help you in generating accurate intraday tips. Several times, the investors consider intraday tips as the Holy Grail. But you cannot rely on it completely. If used with a comprehensive strategy to maximize returns, intraday trading indicators are super beneficial tools.
There is always an inherent risk faced by the day traders. Some of the common factors that are responsible for risk are price volatility and daily volume. They play an important role in the stocks picked for daily trading. Day traders are recommended to not risk over two percent of their total trading capital on a single trade to ensure the right risk management.