Day Trading Stocks for Beginners – FOREX.com | Jewelry Dukan

What are day trading stocks?

Day trading stocks involves buying and selling company stocks in one day or even multiple times a day. It’s considered the opposite of investing, as it seeks to profit from a stock’s short-term price movements during a session, rather than over the longer term.

Another key difference is that day trading uses derivatives, which allow traders to speculate on both falling and rising stocks. This is called walking short.

Learn how to short a stock.

The stock market sees many intraday price movements, known as volatility, related to announcements, news, and other events. So, day traders use analytics to identify the entry and exit points that allow them to take advantage of short-term price movements and make smaller but more frequent profits.

Typically, day traders use leveraged products that increase their buying power. Instead of paying the full value of the stock like you would with an investment, you only need a fraction of the cost — known as margin — to trade.

Leverage comes with its own risks, however, as both your profit and loss are calculated based on your total exposure, not just your initial margin, which can increase your total. Therefore, when day trading stocks, you should always take steps to manage your risk, such as: B. the use of stops and limits.

How to trade stocks every day

You can trade stocks on the day using derivatives such as CFDs, options and futures, which allow you to speculate on a security’s price without taking ownership of the underlying asset. This means you can enter and exit trades faster.

All you have to do is:

  1. Open a FOREX.com accountor log in if you are already a customer
  2. Search for a stock on our award-winning platform
  3. Choose your position and size, as well as your stop and limit levels
  4. Place the trade

If you are new to day trading, we always recommend practicing your strategy in a risk-free environment first. This allows you to learn how to respond to opportunities and execute trades without losing money in live markets.

Try our demo trading account that gives you access to thousands of global markets with virtual funds.

Strategies for day trading stocks

There are a number of strategies that day traders can employ to take advantage of short-term price movements, such as:

  • range trading – known support and resistance lines are used as entry and exit points, exploiting small fluctuations
  • volume trading – This strategy is all about finding a stock with increasing volume and taking a position until the volume goes down
  • High Frequency Trading – which uses computer programs to quickly place large orders to exploit market anomalies
  • news trading – which plays on the volatility that occurs in political, economic and corporate actions on a given day

Day trading strategies can be used in all asset classes, not just stocks.

How to choose stocks for day trading

In order to select stocks for day trading, it is important to have the right tools built into your platform. For most traders, this is a stock scanner that will help you determine which stocks are “in play” at the moment. The best stocks to trade daily are those that exhibit both volatility and volume.

  • Volatility – this is the percentage change in a market over a given period of time. It tells us how fast the markets are moving, but not in any particular direction. It is most commonly shown as a %change across platforms or as a beta – a measure of its volatility relative to the overall market.

    Typically, a benchmark is assigned a beta of 1.0, so a stock’s beta is more volatile when it’s higher than 1.0 and less volatile when it’s lower than 1.0

  • Volume – how many buyers and sellers are currently active in the market. The higher the volume, the easier it is for you to enter and exit positions quickly. Volume is a lagging indicator, typically at 5 minute intervals, and can be found on exchange websites

The best day trading stocks

The best stocks for day trading are those that exhibit high average daily trading volume, liquidity, and volatility in the stock market.

Here are some of the most traded stocks daily by StoneX retail clients.

rank

share

Daily Trading Volume (Nasdaq)

Beta (5 years monthly)

1

Tesla Motors

86, 483, 925

2.18

2

Nvidia Corp

52.114.049

1.65

3

meta platforms

28,718,889

1.33

4

microsoft corp

24.511.248

0.93

5

apple inc

70.928.072

1.23

6

Amazon.com

61.369.335

1.33

7

Alphabet Inc. A

31.650.121

1.08

8th

AMC entertainment

6,731,325

1.67

9

Alibaba Group Holding

14.981.030

0.58

10

Netflix

9,868,823

1.36

How much money does it take to day trade stocks?

There is no set amount of money you need to day trade stocks as most brokers do not have a minimum deposit size. However, if you plan to trade with leverage, you will have a minimum margin requirement that you must maintain in your account to keep your positions open.

If your available equity falls below your minimum margin requirement, you will be placed on margin call. If you don’t top up your balance after that, your positions could be automatically closed.

When trading with leverage, it is important that you never risk more than you can afford to lose.

Day trading with stocks or forex

Basically, day trading stocks and forex use many of the same techniques and strategies, so your decision on which market to trade ultimately comes down to personal preference and goals.

While stocks experience intraday volatility, they are relatively stable compared to the forex market. The forex market is known for its rapid price movements due to the large number of traders in the market – in fact, over $6.6 trillion worth of forex trades take place every day.

So while the forex market offers more opportunities to profit from volatility, it also comes with a much higher level of losses.

The forex market is also different in that it trades 24 hours a day, 5 days a week. So while day trading stocks lets you close positions at a set time of day when the market closes, with FX you could theoretically keep them open 24/7. However, most forex traders still choose to close their positions at the end of their trading day to avoid leaving positions open while they sleep.

Learn more about forex trading


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