Day Trading Stocks-stay Away From New And Unfamiliar Stocks

In day trading, you fight for the best entry price and the best exit price in each trade. Now, every day trader should make some right judgment calls when competing for the right price. Now, the areas where most of the day traders mess up and often go wrong is the in picking stocks to trade, lacking concentration and not watching the market moving news.

First step first. Most new day traders don’t have a solid trading system. Most don’t understand that first you develop your trading system and after that you select the stocks as it is all about working with the right stocks.

Many new day traders have a shaky and weak idea of how to go about doing the right stock picking. Most make the mistake of day trading with unfamiliar stocks. What you need to do is to first become accustomed to the rhythm and swings of a stock that you want to day trade. Try to pick stocks that have similar rhythm and swing. Try to stay on the familiar ground.

Don’t try to trade a stock that you discovered in your late night research session. First try to become familiar with that stock for days and even weeks. Learn how the stock behaves daily. What are the swing patterns the stock follows everyday. After you have thoroughly researched the stock for many days and even week, only then think about day trading that stock.

When you select a stock for day trading, make sure that there are no current headlines that affect the stock that you have chosen. How do you know that there is nothing in the news about that stock? Go through the headlines in the financial sections of different newspaper to see if that stock has got anything reported about it in it. The less news, the better.

It is critical for you to be patient with unfamiliar and new stocks. You should treat all new stocks as your first date. Someone totally new that requires exploration! Most often, the new stock that you find may not be a good stock for day trading. So, initially you should drastically reduce your exposure by trading only 100 shares and not more. Stock picking is the area where most new traders make blunders. Pick your stock carefully.

But my friends, this is not the time for day trading stocks. This is the time for day trading currencies. Trust me; forex day trading is going to make many millionaires in this decade. Forex day trading is much simpler that stock day trading.

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