Day traders buy and sell stocks, currencies or commodities online throughout the day hoping to reap quick profits. Execution speed is paramount. Online day traders are not linked directly to the market through their home computers. When they press "Enter," their orders are sent to brokers, who then send the orders to a market for execution. By the time the orders reach the market, prices could vary greatly from quoted prices.
Instructions
1Equip yourself with a good trading computer (you need at least 1,024 MB of RAM and a 100 GB hard drive), at least three monitors (flat LCD screens are easy on the eyes) and a fast Internet connection. Online day traders must be able to receive streaming, real-time information for quotes and charts. DSL, cable modem or a T1 line is better than any size phone line modem.
Step2Purchase direct-access trading software. This allows you to skip several time-consuming steps when trying to execute your buy/sell orders.
Step3Learn day trading basics. An online day trader must know the difference between "bid" and "ask," between the New York Stock Exchange (NYSE) and the NASDAQ and what "selling short" means.
Step4Choose an online broker. Your broker is responsible for executing your trades. Look for a brokerage firm that offers instant execution of your orders, high leverage with a small margin deposit and low spreads.
Step5Deposit the hefty minimum amount required by law into your brokerage account when you plan on day trading securities.
Step6Open a Forex mini account with the minimum required amount when you plan on trading currencies.
Step7Make sure that the stock quotes and account updates you are receiving are real-time and not delayed. Speed is of the essence when you day trade online.
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