When you learn how to day trade online, you are entering an arena where the outcome is unknown. You have no idea if this trade will win or will begin a string of losses.
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This is the second part of the how to trade video series.
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In case you haven't seen the first video it basically answers a commonly asked question by new traders which is, "What is a day trader?"
In order to begin learning how to trade you first need to figure out what exactly you want to learn to trade. Some of your options include:
Stocks typically applies to larger cap stocks like Apple, Google, General Electric and Coca Cola. The problem with this type of vehicle is that you will need quite a large account to make a significant amount of money. They can be scalped but the bottom line remains that you will need a large account.
Scalping means that instead of making a large profit you take small profits.
The primary reason that this didn't fit my style is that I was looking for a way to make more money with a much smaller account.
The second thing that I tried was penny stocks. For the most part I made money trading these but there was a lot that I did not like about them.
What did I find wrong with learning how to trade penny stocks?
Most of the companies are all crap. So, they are definitely not something that you want to learn how to trade for the long haul. Penny stocks also require quite a bit of research and studying. It takes around 2-3 hours per night doing the required research and finding out information about these companies.
You also have to watch several charts during the trading day. So, be prepared to have your lunch at your desk. Another pitfall of penny stocks is the fact that they fall under the 25k Pattern Day Trader Rules. This rule says that if you are going to take any more than 4 round trip trades within a 5 day period you will need 25k in your trading account.
I also tried options and did not do so well trying to trade these. The primary reason was the fact that I was fairly new to trading and really didn't know what the hell I was doing. The thing about options that interests so many people is the fact that you can make a ton of money trading them, but people forget that you can also lose a ton of money.
For more information on how to trade online watch some of the other videos in this playlist.