How to Day Trade for a Living

Practice trading on a demo account

Instructions

Educate yourself about day trading basics and strategies.
Begin by learning the fundamental principles of day trading, including how the stock market works, what day trading involves, and the different types of trading strategies available. Explore resources like books, online courses, and trading forums to build a solid knowledge base. There are a lot of free resources out there.
Practice with a demo trading account.
Before committing real money, familiarize yourself with trading dynamics by using a demo account. Choose an online broker that offers a virtual trading platform and practice executing both long and short trades. This will help you understand market movements and trading mechanics without financial risk.
Set up and use stock scanners.
Stock scanners help you find stocks that fit your trading criteria, like those with high movements in price within a single day (volatility) and those traded in large volumes. Configure your stock scanner to find high-volatility stocks. Use the scanner results to track how selected stocks perform during the day.
Practice buying long and selling short.
'Buying long' means you buy stocks expecting their price to increase. 'Selling short' involves selling borrowed stocks with the plan to buy them back later at a lower price, which can be profitable if the stock price drops. In your demo account, practice both strategies. Notice how the stock prices moving up or down affect your potential profits.
Develop a structured trading plan.
Successful traders start their day with a plan based on the latest market news and the pre-market performance of stocks. Every evening, review financial news and prepare a list of stocks you are interested in trading the next day. Adjust your plan in the morning before the market opens based on overnight news.
Trade during peak market hours.
The first two hours after the stock market opens are generally the most volatile, meaning they offer the best opportunities for day trading. When trading, schedule it to focus on these early hours. Practice entering and exiting trades within this timeframe to maximize potential profits. Use alerts and market news to adjust your strategy in real time.
Close all positions each day.
Make sure you sell all the stocks you own and cover any short positions before the market closes each day. This avoids the risk of prices changing overnight. To do so, set a reminder to start closing your positions 30 minutes before the market closes to ensure you don't hold any stocks overnight.
Set daily profit goals and stick to them. Decide on a realistic profit target for each day based on your capital and risk tolerance. Once you reach this target, stop trading for the day to avoid potential losses from overtrading. Track your profits throughout the day and stop trading as soon as your goal is achieved. Review your trades at the end of each day to understand what worked and what didn’t. Then, adjust your strategy the next day!