How to Day Trade Stocks

In this guide on how to day trade stocks in 2o24, we’re brining you an extensive guide to show you how to day trade stocks for living, you will also learn the best time to day trade stocks and the best stocks to trade.

The stock market poses challenges for many investors today. However, some investors are earning good profits through day trading, as success relies on volatile, high-volume stocks, which are common today. 

How To Day Trade Stocks  – 5 Easy Steps

If you are embarking on your day trading venture in 2024, you need to understanding five essential actions. These steps are your path to success in the stock market this year.

  • Step 1. Choose a trading platform – An efficient trading platform is essential to day trade stocks. Therefore, the first and foremost step is to choose a fully regulated broker.
  • Step 2. Make a deposit – You require capital to speculate on stock price movements. So, make a deposit that suits your investment strategy.
  • Step 3. Conduct thorough research of the market – To identify the popular stock for day trading, first understand the overall market. Research the best-performing sectors (energy, retail, financials, etc.) to choose the popular stock. We’ll guide you through the process.
  • Step 4. Choose your preferred stocks to trade – Find day-trading stocks by applying market knowledge. Utilize a high-probability trading strategy for entry and exit points, as we’ll explain in detail later.
  • Step 5. Initiate the Trade – Finally, start trading your chosen stocks. Keep in mind that speed is crucial when day trading volatile stocks.

Your capital is at risk. Other fees apply.

Where To Day Trade Stocks – Best Platforms To Day Trade Stocks 

Choosing the right day trading platforms and brokers is crucial for dedicated traders. Speed, reliability, costs, customer service, and charting tools hold immense value for active investors. Furthermore, those employing systematic strategies now prioritize the added importance of backtesting capabilities. So before diving into the fundamentals of how to day trade stocks, let’s see a detailed review of the most popular trading platforms ideal for day trading stocks.

eToro – One of the best trading platforms for beginners in day trading 

The first trading platform that deserves a mention is eToro. The platform is known for its user-friendliness and diverse assets and is highly suitable for anyone who wants to learn how to day trade. Both beginners and experienced users appreciate its order execution and payment options like credit cards and PayPal. eToro’s reviews and ratings reflect its history of customer satisfaction.

Day Trade Stocks eToro

eToro stands out as a top choice for day trading in the stock market as it is regulated in several jurisdictions, providing a level of trust and security for its users. Regulatory compliance is an important factor to consider when choosing a trading platform.

It’s authorized and regulated by the UK FCA, CySEC, ASIC, and FINRA, ensuring safety and security. For stock day traders, tight spreads and fast execution are essential, making eToro one of the most popular scalping brokers in 2024.

eToro Unique Features

Some unique features of this day trading platform are copy trading, a wide range of assets, including cryptocurrencies, and a user-friendly mobile app. You can sort traders by performance, risk score, and more. Try it risk-free with a virtual account offering $100,000 for strategy testing.

With over 20 million users, eToro’s platform and stock app are the world’s largest social and copy trading platform. This enables traders to share ideas and help in stock selection for day trading. You can also check other day traders’ performance using personalized filters aligned with your preferences and risk tolerance. 

Why Choose eToro For Day Trading Stocks 

Another standout feature of this trading platform is CopyTrader, which allows users to automatically replicate successful investor trades on the platform. This can be a helpful tool for those who want to benefit from the expertise of more experienced traders.

eToro Best Place to Day Trade Stocks

eToro offers real-time stock buying, spanning all sectors worldwide, including the US, UK, Europe, and Asia. Moreover, you can trade these stocks with a 0% commission, maximizing your profits. eToro provides access to popular dividends and undervalued stocks.

While competitors may offer various services, eToro’s dedication to education through videos, smart portfolios, and diverse assets distinguishes it. With options like leverage and ProCharts, eToro caters to day traders of all experience levels.

eToro Stock Platforms (Pros And Cons) 

Pros:
  • User-friendly interface
  • Extensive selection of 3,000+ stocks
  • 300+ available ETFs
  • Trading for leading cryptocurrencies
  • Zero-commission stock trading
Cons:
  • Some features not accessible in the US
  • $5 withdrawal charge
  • Complex crypto withdrawal procedure

 76% of retail investor accounts lose money when trading CFDs with this provider.

Day Trading Explained

Before diving into the tips and tricks on how to day trade stocks, let’s see what day trading actually is and the process behind it.

The Basics Of Day Trading 

Day trading involves rapidly buying and selling securities within a day, often within seconds. It capitalizes on short-term price swings, distinct from traditional investing. Day traders actively speculate on stock price changes, executing multiple trades during the day with the aim of securing modest gains. This approach is commonly applied to various markets, including stocks, currencies, and cryptocurrencies.

The primary goal of day trading is to exploit the market’s inherent volatility and liquidity, as prices can fluctuate significantly within a single trading session. Day traders employ advanced strategies such as technical analysis, chart patterns, and market indicators to pinpoint their trades’ entry and exit points.

Common markets for day trading include stocks, currencies, and cryptocurrencies. The objective is to harness market volatility and liquidity, utilizing techniques like technical analysis and chart patterns to identify precise entry and exit points.

How Does Day Trading Work?

Day trading demands continuous vigilance over the stock market and rapid decision-making. Traders often opt for leverage that involves borrowed funds to take larger positions with increased risks in case of unfavorable trades.

Day traders commonly rely on technical analysis, utilizing chart patterns and indicators to identify potential trading opportunities and recognize market turning points.

Day Trading Stocks

Image Source: IG Charts

Contracts for Difference (CFDs) offer a means to speculate on market price directions, empowering day traders to profit from both upward and downward market movements. This flexibility is essential for short-term profit endeavors in the dynamic market. For an added dimension, some traders also incorporate algorithmic trading strategies to automate and enhance their decision-making processes.

Read Also: Stock Trading VS Forex Trading

Popular Intraday Strategies Used By Day Traders

Now you know the basics of day trading and fundamentals of how to day trade stocks. Day traders utilize various intraday strategies tailored to capitalize on short-term market fluctuations. Some popular approaches include:

Scalping

This strategy emphasizes generating multiple small profits by capitalizing on fleeting daily price changes. It involves making numerous small trades to capitalize on minimal price movements. Scalpers aim for small profits and typically hold positions for a very short duration.

Range Trading

This strategy relies on pre-established support and price resistance levels to guide the trader’s buy and sell decisions. It includes identifying stock price ranges and trading within those bounds. Traders buy at the lower end and sell at the upper end, taking advantage of predictable price movements.

News-based Trading

This strategy capitalizes on trading opportunities arising from the increased volatility surrounding news events. It also includes reacting to breaking news and its impact on stock prices. Traders capitalize on the volatility caused by significant news events.

High-frequency trading (HTF)

These strategies, utilizing sophisticated algorithms, aim to exploit small or short-term market inefficiencies.

Mean Aversion 

This strategy assumes that prices will revert to their historical average over time. Traders identify stocks that have deviated significantly from their average price and enter positions expecting a return to the mean.

The Difference Between Day Trading And Investing

You might be familiar with the fundamentals of how to day trade stocks. However, you also need to be clear on the differences between day trading and investing. Both share the common goal of making a profit in the stock market, yet they diverge significantly in their approaches. Day trading involves short-term trading, where positions are bought and sold within minutes to hours. In contrast, investing entails a longer holding period extending over years.

The key disparity lies in the duration of holding a trade or investment. Day traders typically hold positions for a day and close them before the market closes, aiming to be flat overnight. On the other hand, investors typically maintain positions for much longer durations, ranging from several months to several years.

Successful day traders can achieve a significantly higher rate of return than investors because day trading involves active daily trading to capitalize on short-term market movements. Day traders aim to time the market effectively.

In contrast, investors do not attempt to time the market. Instead, they seek investments that will appreciate over a more extended period, typically 1 to 3 years. This approach requires enduring market ups and downs, experiencing substantial price swings in profit and loss along the way.

Another key distinction lies in the timeframe used for decision-making. Investors often analyze higher time frames like monthly, weekly, and daily charts. Day traders, however, are more inclined to use lower time frames such as 15, 30, or 60-minute charts.

Benefits Of Day Trading Stocks

Traders and investors have various advantages within the world of intraday trading. From the potential for high returns to the adaptability of strategies, this section explores the compelling reasons that make day trading an enticing venture for market enthusiasts. It’s important to know the benefits of day trading and learn the basics of day trade stocks. Day trading stocks comes with several benefits, including:

High Return Potential

Successful day traders can generate substantial profits by actively participating in frequent trades and capitalizing on short-term market movements.

Quick Profitability

Day trading allows for leveraging intraday price fluctuations, creating chances for swift profits within a single trading session.

Easy Risk Mitigation

Day traders typically close positions before the market closes, mitigating the risk associated with overnight market movements impacting their portfolio.

Market Liquidity

The stock market’s high liquidity enables day traders to enter and exit positions easily, even when dealing with significant volumes.

Ease Of Access

Online trading platforms have made day trading more accessible for individual traders, requiring only a computer or mobile device and an internet connection.

Flexibility And Adaptability

Day traders can swiftly adjust their strategies to evolving market conditions, allowing them to capitalize on various market environments.

Complete Autonomy

Day traders have complete control over their trades and strategies, fostering independent decision-making.

Ways To Make Money From Day Trading Stocks

Along with exploring how to day trade stocks, one must be aware of the multiple ways and tips to make money from trading. Day trading might not suit everyone, but it can be a quick method for those determined to earn money trading stocks. It comes with significant risks, and without proper preparation, you might risk losing your entire investment. However, with the right readiness and knowledge, day trading can lead to a successful and rewarding experience.

Complete Understanding Of The Market

Success in making money through day trading depends on market understanding and well-informed decisions. Armed with knowledge, tools, and determination, you can thrive in this market-driven investment. Active participation in discussions and forums related to trading is crucial for enhancing your skills and staying updated.

Use A Commission-Free Stock Broker

Day trading success lies in consistently profiting from short-term price movements within a single trading day. Ensuring that hefty trading commissions do not erode the profits earned is crucial.

Cut Losses With Limit Orders

Implementing protective measures is crucial to safeguard your investment and minimize potential losses. Specify the stock quantity you will buy or sell to facilitate quick and hassle-free order fulfillment. Additionally, setting a stop-loss point is essential to prevent unnecessary losses when placing a limit order.

Focus On A Core Selection Of Stocks

Each stock possesses a unique character and follows a specific pattern. Optimal day trading involves focusing on stocks you are intimately familiar with. Initially, concentrate on a select few stocks and trade them consistently. This approach allows you to grasp the movement characteristics of those stocks, increasing the likelihood of identifying and trading on emerging patterns.

Trade A Strategy And Focus On Risk Management

A day trading strategy is crucial. Since you’re dealing with short-term price changes, analyzing all available information is key for deciding where the market might go next. Your skill in processing this information is vital for entering at a favorable price.

A strategy acts as a checklist, aiding quick analysis while staying objective. For better risk management, keep your trade sizes small to prevent your account from wiping out if a few trades turn against you.

Stop-Loss Orders

In day trading, stop-loss orders play a crucial role. Placing them is vital to prevent significant losses and safeguard your account if the market turns unfavorable.

Start On A Small Scale

When venturing into day trading with real strategies, it’s advisable to start small and gradually increase your scale. Initially, align your profit goals with your simulator sessions, then progress as you gain comfort. A common approach for beginners is to aim for $200 per day and gradually build up to $800-$1000.

Prioritize small wins over big gains to maintain discipline and stick to your plan. While occasional significant wins may occur, the real essence of day trading lies in consistency. Ensure your position sizes match your risk tolerance, and remain vigilant against letting emotions dictate your decisions.

Learn About Technical Analysis

Most day traders use technical analysis when figuring out how to day trade stocks and which stocks to day trade in. This means studying price and chart patterns. You can find a lot of helpful information about technical analysis online.

What Are Day Trading Hours?

You might be familiar with how to day trade stocks, but what are trading hours, and how do you utilize them? Understanding the optimal trading hours is crucial to finding stocks for day trading today. Most day traders target the US stock market, the world’s largest. Stocks trading on the New York Stock Exchange (NYSE) and the NASDAQ Exchange begin at 9:30 am and conclude at 4:00 pm Eastern Time (ET). 

While day trading in the UK and European stock markets is feasible, it’s essential to note that the most substantial price moves often unfold in the US. Factors such as market news, economic releases, and corporate announcements tend to have a more pronounced impact on US stocks, influencing the potential for significant intraday gains or losses.

For Indian markets, intraday trading spans from 9:15 am to 3:30 pm, with a pre-open session from 9:00 am to 9:08 am. In India, real-time trading commences at 9:15 am daily and closes at 3:30 pm. A post-close session follows, where the contract price equals the day’s closing price. In the UK and Europe, you can also day trade stocks, but the most significant price moves typically happen in the US market, making it essential for day traders to focus there.

What Are Stock Price Movements?

Stock Price Movements

Stock prices are established in the marketplace, where sellers’ supply intersects with buyers’ demand. In day trading, the movement of prices is paramount because profits can only be realized if the security price has shifted from one level to another. Therefore, it’s advisable to focus on times of the day when there is the most price movement.

The provided chart illustrates the price activity using a 15-minute chart for Apple’s share price, with the Average True Range (ATR) indicator below. The ATR informs us about the average range of price bars for each 15-minute interval.

The interplay of seller supply and buyer demand determines stock prices. In day trading, the movement of prices is paramount; profits materialize when prices shift. Concentrating on time frames exhibiting the most significant price movement is advised.

Examining the chart depicting Apple’s 15-minute price activity with the Average True Range (ATR) indicator below, we can discern the average price bar range for each 15-minute interval.

Notably, there’s a consistent spike in the ATR reading at the same time daily, marked by vertical lines indicating new days. These spikes tend to coincide with the end and beginning of the trading day, with lower readings in between.

This pattern suggests heightened stock price movement during the day’s last and first 30 minutes. Consequently, many day traders strategically focus on these specific times to capitalize on more substantial price swings.

Factors That Affect Stock Prices In The Market

Now that the “how to day trade stocks?” question has been addressed. The next logical inquiry is, why do stock prices change every second? Numerous factors can influence the price movements of a specific stock.

Company-related Factors

A share represents ownership in a company. Therefore, any positive or negative news related to the company can influence its stock price.

Market Trends

Two terms often heard in the stock market are Bull and Bear. These aren’t events but trends or phases that cause fluctuations in the stock market.

Industry-related Factors

Industry-related factors can positively or negatively impact the share prices of all companies operating in that industry.

Economic Factors

In addition to the mentioned factors, various other elements can influence the market. These encompass geopolitical conditions, macroeconomic shifts, investor sentiments, changes in GDP or inflation rates, etc.

For instance, an unexpected change in the central or state government often leads to a market decline. Similarly, an increase in a company’s overall GDP can trigger a boom in the share markets.

What Are The Most Popular Stocks To Day Trade?

Now that you’re acquainted with effective day trading strategies and the key steps of how to day trade stocks for profitable returns, let’s explore some of the most popular stocks in the market that are ideal for day trading. As you aim to build a portfolio for both long-term results and short-term gains, identifying the best stocks for day trading is crucial for your watchlist.

This list predominantly features blue-chip stocks. While the allure of discovering popular penny stocks for day trading may be strong, it’s essential to note that this is a risky endeavor, especially for beginners.

1. Apple (AAPL) – One of the most popular day trading stocks in the market

The first best day trading stock in this guide on how to day trade stocks is Apple. It is a globally recognized company and among the most popular day trading stocks in the market. Its prominence is heightened by having undergone five stock splits. Familiarity with Apple’s product launch cycles is advantageous for trading, as the stock price tends to rise in anticipation of the hype generated by new product launches.

Apple - popular day trading stocks

Most people are familiar with Apple and will have an understanding of when there are new product launches. This knowledge will prove to be useful when trading as Apple’s stock price can rise before a new product launch as investors anticipate the hype it can bring.

AAPL has snatched the limelight again with the recent stock split. A stock split occurs when a company issues more stock to reduce the per-share price while maintaining the same overall market value. This allows trading on a trillion-dollar company at a lower price, facilitating regular stock purchases throughout the day in day trading.

2. NVIDIA (NVDA) – Popular day trading stock with high volume

Headquartered in Santa Clara, California, NVIDIA specializes in designing and manufacturing graphics processing units (GPUs), system-on-a-chip (SoCs), and other high-performance computing technologies. Widely used in gaming, data centers, AI, and self-driving car development, NVIDIA’s products are integral to electric vehicles, crypto mining rigs, gaming consoles, and various electronic items.

NVDA - Popular day trading stock

NVDA stock has maintained a bullish trend throughout the year, with an 89% increase since February and a 176% gain year-to-date in 2023. Its remarkable growth is primarily attributed to the robust AI wave currently sweeping the markets, with NVIDIA just beginning to tap into this growth opportunity.

As one of the most popular stocks for day trading, NVDA boasts a high trading volume, with over 62 million shares traded daily—nearly ten times more than Amazon’s shares. This significant turnover creates intraday moves that day traders can capitalize on.

Despite its daily spikes being relatively small, they present opportunities for quick gains amid the ongoing AI wave. Moreover, the stock is comparatively affordable, making it an attractive option for day traders with smaller accounts.

3. Tesla (TSLA) – Most favored stock of day traders

Tesla, America’s most popular electric vehicle manufacturer led by the controversial Elon Musk, faced significant challenges in 2022 due to unique complications. Despite a strong year in terms of net income, the company’s stock plummeted by 65% over the last year following Musk’s infamous Twitter takeover.

TSLA - Most favored stock of day traders

A favored choice among day traders is Elon Musk’s company, Tesla. Many traders are drawn to Tesla stock simply because they admire Elon Musk. However, the primary reason lies in the surging demand for electric vehicles, a hot sector experiencing exponential growth that results in significant moves in Tesla’s share price—an ideal addition to the watchlist for day trading stocks.

While the company’s involvement with AI contributes to its value, Tesla’s fortunes are closely tied to the overall market sentiment and the growing interest in AI.

4. Amazon (AMZN) – This day trading stock is known for its historical volatility

Amazon, valued at over $1.3 trillion, continues to grow through product innovation and strategic acquisitions. Despite a volatile history, the company has experienced share-price growth in 2024, rebounding from the global tech selloff. The robust performance of its profitable division, AWS, played a role in this recovery, with shares seeing an upswing in August.

AMZN Stock

As one of the world’s largest companies, Amazon witnesses over 7 million shares changing hands daily. The recent announcement of a stock split, making its shares more affordable, further attracts day traders, anticipating increased intraday volatility in the stock price.

5. Microsoft (MSFT) – One of the most favored day trading stocks that offers steady growth

Microsoft stock is known for its stability and steady growth, driven by its diverse product offerings, including software, cloud services, and hardware. With a strong market capitalization, Microsoft is considered a blue-chip stock favored by long-term investors for its consistent performance and dividend payouts.

MSFT Stock

Microsoft often exhibits significant price movements during the initial hour of the trading session, making it a noteworthy addition to your watchlist. Utilizing the appropriate platform and trading with a commission-free broker such as eToro becomes crucial when deciding on stocks for day trading.

Your capital is at risk. Other fees apply.

Popular Day Trading Strategies

Given the diverse range of strategies available, developing a trading strategy is crucial for success in day trading. Initially, traders often experiment with various approaches and gradually narrow down to one or two strategies that align with their preferences and prove effective in their trading endeavors.

Trend Trading Strategies

Trend trading is a trading style that attempts to capture gains through the analysis of an asset’s momentum in a particular direction. When the price is moving in one overall direction, such as up or down, that is called a trend. Day trading trend strategies are by far the most common among day traders.

Trend trading for day trading stocks

This involves identifying an uptrend where there has been consistent buying historically and continuing to buy shares as the trend continues. Indicators such as moving averages are very useful in helping to identify the trend of the market and stick to it.

For example, in the 15-minute chart of NVIDIA’s share price below, you will see that as the price crosses above the red line (20-period exponential moving average), the trend continues higher.

When the price is above this moving average, it means that the trend is up, and more buyers are in control of the market. Furthermore, as this indicator is used heavily by algorithmic traders, as well as day traders, you can see that buyers stepped back into the market at the moving average.

This is because the indicator also provides levels of support where day traders may think about purchasing more shares at the moving average line as an entry into the overall trend. The most common moving averages used by day traders are the 20 and 50 exponential moving averages.

Trend trading strategies assume that security will continue to move in the same direction as it is currently trending. Such strategies often contain a take-profit or stop-loss provision to lock in a profit or avoid big losses if a trend reversal occurs. Trend trading is used by short-, intermediate-, and long-term traders.

Momentum Trading 

Momentum investing is a trading strategy that relies on identifying and capitalizing on the continuation of existing price trends in the market. Investors employing a momentum strategy seek to buy securities currently on an upward price trajectory, anticipating that the price momentum will persist.

The underlying principle is to ride a stock’s momentum as it moves higher, selling before signs of a reversal or peak in the price become apparent. Successful momentum investing requires a keen eye for identifying stocks with strong upward trends, as rapid and substantial price increases often characterize such stocks.

Traders employing this strategy usually focus on stocks that have exhibited consistent positive performance and are likely to continue their upward trajectory based on market indicators, technical analysis, and other relevant factors.

Countertrend Trading Strategies

Countertrend trading involves making small gains by strategically trading against the prevailing trend in the market. Also known as counter-trend strategy, this approach is favored by day traders, especially in market conditions that lack a clear, sustained trend. However, many countertrend traders still consider the longer-term trend in higher time frames.

In counter-trend trading, traders aim for smaller profits and are ready to exit positions if the anticipated correction doesn’t materialize. This strategy goes against the conventional wisdom that suggests aligning with the trend for favorable outcomes. For instance, day traders might opt for a 15-minute countertrend move while keeping an eye on the 1-hour chart trend, seeking a higher reward-to-risk ratio.

The stochastic oscillator is a common indicator used in counter-trend day trading strategies. This indicator helps identify reversal divergences in the market, offering traders insights into potential turning points, as illustrated in the accompanying chart.

Highlighted in green in the chart above are reversal divergences indicating two types: bullish and bearish.

Bullish Reversal Divergence: This occurs when the price moves lower, but the stochastics move higher.

Bearish Reversal Divergence: This happens when the price moves higher, but the stochastics move lower.

Divergences in stock prices serve as valuable indicators, offering insights into the potential exhaustion of a price trend and signaling the possibility of a reversal leading to a countertrend move.

Gap Trading Strategies 

The gap refers to the difference between the closing and opening prices of two consecutive candles on a price chart. It occurs when prices skip between two trading periods, leaving a void where no trading has occurred. Price gaps are frequent, especially in stocks, due to the non-24-hour trading cycle. Day traders often capitalize on these gaps, taking advantage of the rush of activity at the opening bell when traders are scrambling to enter or exit positions.

Gap Trading for Day Trading Stocks

There are a variety of different gaps that day traders can exploit. These include:

Day traders can leverage various types of gaps in stock prices, each providing unique insights into market trends:

  • Continuation gaps: These occur in the middle of a trend, serving as confirmations of the trend’s strength.
  • Exhaustion gaps: These appear at the end of a trend, signaling potential failure for the market to sustain its prior direction.
  • Breakaway gaps: These gaps emerge after a trading range and confirm a breakout from the range-based pattern.
  • Common gaps: These gaps represent areas where the price has gapped without any additional significance.

Day traders strategically exploit these gaps for informed decision-making during their trading sessions.

Reversion To Mean Trading Strategies

Reversion to mean trading strategies, or mean reversion strategies, hinge on the concept that an asset’s price or value tends to fluctuate around its long-term average or “mean” over time. When the price deviates significantly from this mean, there is a tendency for it to revert back.

These strategies are particularly effective in trading ranges when a stock lacks a clear trend. While many traders prefer trending stocks, market sentiment occasionally confines prices within a sideways trading range. Day traders, aiming to utilize their capital efficiently, find value in employing reversion to mean strategies, often utilizing indicators like Bollinger Bands.

Reversion Trading for day trading stocks

Bollinger Bands not only gauge market volatility but also serve as potential support and resistance levels in trading range scenarios, aiding day traders in navigating diverse market conditions.

In reversion to mean trading strategies, day traders adopt a systematic approach, selling a stock when it reaches the upper Bollinger Band and trading it towards the middle line, often represented by the 20-period moving average.

Conversely, if the price reaches the lower Bollinger Band, traders would buy the stock and navigate it back to the middle line. The underlying principle is to guide the price back to the market mean, typically represented by the 20-period moving average.

News Trading Strategies

Another effective method to choose stocks for day trading is by staying informed through market news. As stocks represent public companies, regular market-moving news announcements, such as product launches, management changes, sales numbers, or hedge fund manager stakes, can significantly impact stock prices.

How to day trade stock news trading

News trading is a strategy that capitalizes on market opportunities created by relevant economic data and information hitting the headlines.

Accessing crucial news announcements for a specific stock can be done through various channels. One highly effective approach is using the eToro news feature, which also includes a sentiment trends indicator to gauge how news is influencing the share price and whether it is moving higher or lower.

Is Day Trading Safe?

By now, you must have a basic understanding on how to day trade stocks. Day trading has garnered significant attention, with some viewing it as a lucrative way to generate quick profits, while others have experienced the inherent risks of speculative investing.

Choosing a reputable and regulated broker is a critical step in ensuring the safety of day trading activities. The safety of day trading hinges primarily on the choice of the broker, as they hold your capital and execute your trades. Opting for a regulated and transparent broker is crucial for a secure day trading experience.

Regulations provide a level of oversight and protection for traders, and reputable brokers comply with these regulations. Platforms like eToro, with multiple regulatory authorizations and memberships, offer traders confidence in the safety and legitimacy of their operations.

Day trading involves actively buying and selling securities within the same day to capitalize on short-term price changes. However, it also involves increased risk, especially when using borrowed or leveraged capital.

Platforms like eToro are considered safe for day trading, being authorized and regulated by reputable bodies such as the UK Financial Conduct Authority (FCA), the Australian Securities and Investments Commission (ASIC), and the Cyprus Securities and Exchange Commission (CySEC). eToro is also registered with FinCEN and is a member of FINRA and SIPC, adhering to US-based regulations. Additionally, eToro allows the use of stop-loss and take-profit orders, enhancing safety measures for day traders.

How To Day Trade Stocks: Steps By Step Instructions

Once you have the answer for how to day trade stocks, it’s time to begin trading. Here’s a step-by-step instruction on how to begin your trading journey. 

Step 1. Create Your Account

Sign up via etoro

Opening an account for day trading is a relatively straightforward process that can be completed in just a few minutes. To get started, you’ll need to visit the trading platform’s website and locate the “Open an Account” or “Sign-Up” section. Now add your personal details. 

Step 2. ID Verification 

To adhere to Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, verifying your identity is imperative.

Submit two essential verification documents: a valid passport or driver’s license and a recent utility bill or bank account statement issued within the last three months. This process ensures a secure and compliant trading environment.

Step 3. Fund Your Account

Deposit funds on eToro

After acquiring the knowledge of selecting stocks for day trading, the next step is depositing funds into your trading account to initiate trades.

Step 4. Begin Day Trading Stocks

eToro Alphabet Stock

Initiate your day trading by clicking on the Trade icon, which will open a trading ticket, allowing you to execute your orders seamlessly.

Your capital is at risk. Other fees apply.

Conclusion – How To Day Trade Stocks

As a day trader, you pick the markets and investments you want to focus on. Your goal is to buy and sell during the day, trying to time your moves to make money. For example, you might buy a stock right before a big announcement makes its price go up and then sell it when you think the price is at its highest.

Professional traders are quite picky because succeeding or failing in markets can be really close. The trading platform you choose matters a lot. Nowadays, even regular people can do day trading on the stock market because of technology and more brokers. 

It’s easier than ever to start trading stocks like Apple and Tesla, but just a heads up, it doesn’t mean you’ll instantly make money. If you want to earn well and see good results consistently, you need a solid plan for day trading. This comprehensive guide on how to day trade stocks would help you in ensuring a profitable trading journey. 

Author Checked Reviewed and Fact Checked by Wajeeh Khan, Fintech, Blockchain Writer and Investment Analyst.

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Frequently Asked Questions 

Can anyone become a day trader?

While anyone can theoretically become a day trader, it requires a good understanding of the markets, discipline, and risk management skills. It's not suitable for everyone, and success is not guaranteed.

Yes, some brokers allow day trading with a small account, but it's important to manage risk carefully. Using leverage can amplify both gains and losses.

Day trading focuses on short-term price movements and involves closing positions within the same day. Long-term investing, on the other hand, involves holding assets for an extended period, often years.

Day trading demands active involvement during market hours. Traders typically spend the entire trading day monitoring positions, analyzing charts, and making quick decisions.

Yes, day trading carries inherent risks due to the volatility of short-term price movements. It requires a good understanding of the markets and risk management.

Risks include market volatility, financial losses, emotional stress, and the potential for making impulsive decisions. Traders should be prepared for both gains and losses.