You need to understand the concept of day trading itself to be able to understand how the process works. Day trading is about buying and selling shares of a commodity in one day. You usually need to close all your share positions at the end of the trading day. If you are going to have success at day trading, you need to understand why the stock and share prices fluctuate.
Stocks that move in large amounts in day trading means that a lot of people have bought this stock. It can also mean one person has bought a lot of shares. This is not the norm in day trading, so it usually means something.
It normally means that these people have some information about the stock which you do not. The feel that a large scale investment in a certain stock will pay off. If a stock doesn't move much in day trading, this means that not many people have bought the stock, or not much has been traded.
There is a rule used in day trading when you short a stock. This is called the uptick rule. It is used in day trading to stop the stock going down too quickly. An uptick has to be executed in markets meant for selling stocks. If there is not an uptick and the stock falls, you will be executed for the fallen price. This can be prevented if you place a limit order.
It does not matter if you are filled or not at the price, if you are using a limit order, but it does ensure that you have no stock slippages. Down trends happen quicker than up trends in day trading so, with the uptick rule, you can lose money when there is major slippage or miss big moves. Missing big moves is preferable to losing money, so you should always go for a limit order when short selling in day trading.
Sometimes you may consider doing day trading in a partnership. This is an advantageous proposition as the person having money and experience proves to be invaluable to the novice in day trading investing. Thus as partners, trading can be done in large sizes and thus lead to better profits.
The only potential problem with partnerships is that you have to make sure you both agree on trading decisions and contingency measures. You might end up arguing unless you sort this out first.
The partner you choose should be someone you know and completely trust. If you are not sure about your partner, and disagree with his trading methods, it is better that you go about day trading on your own.
You need to conquer the five human weaknesses before you start day trading. These are jealousy, greed, pride, ignorance and fear. Fear and greed are often found in day trading, when someone trades too much stock for too long. If you are fearful, you might withdraw too early from the game and forfeit potential profits.
Ignorance in day trading may make you commit numerous mistakes while pride will not let you admit that you are wrong. With this, you encounter small losses, which may accumulate into large losses just because you are too proud to admit that you are wrong in your trading. And when jealous, you may end up trading in a subjective manner.