The best day trading basics and education

  • Posted on: 10 November 2017
  • By: Rebeca

Let’s start with a brief introduction to day trading. Day trading refers to the instant purchasing and selling of securities. It usually involve the buying and consequent reselling of same securities on the same day or daily in order to make instant profits from the price movements. It is both dangerous and lucrative depending on day trader’s experience.

Since day traders seek to make profit by exploiting even the smallest price movements in individual assets – most times stocks, although options, futures and currencies are also traded. It is essential for them to have the best trading education , to decide what to focus on. Basically, day traders look out for three things when trading in a stock, these are: volatility, liquidity, and trading volume.

Volatility refers to the measure of the anticipated daily price range – this is the range in which day traders operate. High volatility signifies either greater loss or profit. Liquidity enables day traders to enter and exit a stock at a profitable price (i.e. the difference between the anticipated price and the actual price of a trade). Trading volume measures the number of times a stock is purchased and sold in a given period of time usually within a day of trading. A high level of trading volume specifies a lot of interest in a stock.

After choosing the kind of stocks/asset you want, you also need to be educated on how to identify entry points – this is the exact moment you are going to invest. There are usually 3 tools a day trader can use, among which are:

Real-time news services: these services offer news about moving stocks. If you subscribe to such services, you will be informed of potential market-shakings.
Intraday candles tick charts: these charts provide a raw analysis of price actions.

The best live trading room provides us with the necessary networking and feedbacks. So, it is useful in providing knowledge of trading.