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The Complete Guide to Stock Day Trading and the Best Strategies for Successful Investing

Analyst Team trader
Updated 24 Apr 2023

Many stock market investors and traders consider diversifying the risk of their stock portfolios but are unsure how to do so. In this article, we will walk you through the complete day trading guide as well as the best day trading strategies you can use for successful investing.


best stocks for day trading

What is Day Trading and How Can You Get Started?

Short-term trading, also known as day trading strategy or day trading, is the purchase and sale of stocks in less than 24 hours. These day traders typically trade on a daily basis. They might trade twice or dozens of times in a single day.

Day trading gives the trader more control over the trades they open because they are not subject to overnight charges. Day traders typically keep a close eye on market movements. According to the system they install, they will act quickly if something is profitable or potentially profitable. This is because they will be able to concentrate on a higher winning percentage in their trades.

Your trading environment must be supported by robust tools if you want to day trade successfully. Among the fundamental requirements are:

  • Durable Computer
  • Large Monitor
  • Fast internet connection

How Does Day Trading Work?

Day Traders trade the market five days a week (with the exception of cryptocurrency, which is traded 24 hours a day, seven days a week). The opening hours of the Stock Exchange are given special attention because the majority of traders are present, and the trading volume is very high. Day trading can be considered a regular job, but it does not provide a steady income if done as a hobby. Professional day traders in banks or institutions are paid a fixed salary plus bonuses for profit-making.

Some traders prefer to trade for a few seconds and others for a few hours. Day trading is tailored to the trader's preferences. Traders are always subject to market conditions. You cannot make a successful trade if there is no movement. The market's high volatility (movement) is a force trader's friend.

Stock Day Trading Strategies for Successful Investment

stocks for day trading

1.  Equip Yourself with Enough Information

Daily trading is typically performed by traders who have prior experience and a thorough understanding of the market's fundamentals. Many people advise new traders to refrain from doing it. However, if you are interested, you should arm yourself with significant knowledge.

These fundamentals include procedures, trading tools, in-depth knowledge of the products to be traded, and market conditions. Find out what factors can affect the price as well.

Checking long-term trends is one method many day traders employ. The long-term trend is usually in the 1 to 4-hour time frame. They enter the market to open a position after determining the direction of the trend. The most common time frame is 10 to 15 minutes. The strategy of detecting this trend is also referred to as trend trading.

3.  Utilise Counter Trend Trading

Not all day traders base their daily trading decisions on long-term trends. Some traders prefer to open positions in the opposite direction. This is done so that they can enter the market earlier if the trend changes. This strategy, like the long-term trend, can make use of a time frame with a duration of 10 to 15 minutes.

4.  Take Note of the Margin

Margin trading is the practice of trading assets using funds obtained from securities firms as third parties. When using margin trading, you are trading using money that does not belong to you. That is, there are some risks you must be willing to accept.

Margin trading is not recommended for beginners, even though it can aid in trading. The reason for this is that there is a chance that you will mishandle the situation, resulting in massive losses.

5.  Specify Exit and Entry Times

The correct entry and exit times determine your level of day trading success. As a result, carefully consider when to enter and when to exit, as well as the price level at which you will exit. You can avoid trading blunders this way. If you notice less favourable market conditions, it is a good idea to exit as soon as possible to minimise losses.

6.  Limit the Capital You Use

For starters, when it comes to day trading, you should not go all in. Begin your trading with low-value stocks or foreign currencies. You can choose a maximum of two stocks for your portfolio. You can learn to track and look for profit opportunities more easily with a small investment. Using a large number of stocks or foreign currencies when you do not understand market conditions makes it difficult to exit at the appropriate time.

How to Choose Stocks to Day Trade



This is most likely the most important characteristic of the best stocks for intraday trading. Liquid stocks are traded in large quantities, allowing for larger purchases and sales without affecting the price. And, because intraday trading strategies frequently rely on speed and precise timing, you never want to be left without a market for your stock at the end of the day.

Moderate Volatility

Most traders avoid highly volatile stocks, which are those whose prices fluctuate violently and/or in unpredictable ways, with prices fluctuating more than 5% on a typical day. Instead, they stick to equities that move at a more moderate pace – you want the stew to boil, but not boil – and, in fact, make their money from small price changes rather than large ones. Stocks that are highly volatile tend to be somewhat liquid as well.

Group Followers

While some traders specialise in contrarian drama, the majority of traders seek equities that move in relation to their sector and index group. This means that when an index or sector rises, so does the price of an individual stock. These equities are more reliable and predictable in their movements because they follow the expected path in their industry or category, making it easier for you to move yours.

Best Stocks for Day Trading

Etsy Inc.

Etsy Inc.'s stock price, like many others, surged during the pandemic. This indicates that the stock's price movements are volatile, with more profitable swing trading opportunities.


Another best stock for day trading is NIO, a Chinese multinational vehicle manufacturer. While the company’s shares are significantly below its pandemic highs, it, the stock is highly traded and liquid, making it a good candidate for day trading.

Tesla Inc.

Lastly, Tesla Inc. is another popular choice for day traders because of the organisation’s major proponent of environmental conservation. Again, it is another stock that hasn’t performed well lately and is highly liquid. As a result, it provides many opportunities to trade each day.

Best Brokers for Day Trading

With hundreds of active providers in the online space, choosing the right online trading platform for your day trading needs is not an easy task. For example, a platform should not only have an excellent reputation and support the financial markets of your choice – but should also offer competitive payments and the best customer support. To help you in the right direction, below you will choose the best brokers for Day Trading.

1. eToro

eToro is widely known as the best trading platform to consider for your trading journey. This broker is ideal, especially for new traders or investors.  It has a great interactive platform and an easy-to-use interface. In addition, eToro supports several asset classes, allowing you to trade over 5,000 instruments..

2. Libertex

Libertex is a popular CFD trading platform among UK traders who prefer low fees and commissions. On the front of this is a zero-spread platform offer. This means that regardless of which asset you specify to trade, there is no gap between the buy and sell prices. As such, this allows you to profit from industry -leading quotes. Also, although Libertex charges a commission for each trade, this is often very low. In fact, the commission is often below 0.1% for each order. For example, the popular forex pair NZD/USD can be traded with a commission of only 0.012%. In terms of supported markets, Libertex offers CFDs on stocks, commodities, and currencies

Day Trading Tools or Softwares to Use

Among the popular software among day traders are:

  1. Share Investor / Bursa Station
  2. Nexus Chart
  3. Trading View
  4. Homily chart
  5. Fiavest

Share investor/Bursa Station

Excellent software, but it necessitates a high level of skill to fully utilise it. To reap the full benefits, you must be technically savvy as well as skilled at trading. When purchasing software for the first time, make sure to get a guide or training package so that it is worth using with the software's capabilities.

Nexus Chart

Excellent free level charting. There are numerous indicators (if you trade using indicators). The majority of brokers have subscribed to the Nexus Alerts Chart. The alert will be triggered based on a predetermined algorithm. There are several packages and modules available if you want to subscribe directly from the Nexus Chart. The free version of the Nexus Chart, however, does not include any real-time data.

Trading View

Trading View is one of the most popular charting software because it provides basic accounts for free to investors. This software is suitable for inexperienced traders and investors, as it provides a good screener, is user-friendly, and is equipped with a variety of indicators (including custom user-created indicators at public indicator library). Paid packages include extras like real-time data subscriptions, live alerts, and access to more gun indicators on your chart.

Homily Chart

Known as a little more expensive charting software, although a free version is available on mobile phones. According to public feedback, the Homily Chart is well-known for its MCDX (Multi Color Dragon X) indicators.


Fiavest is an excellent software for intraday traders. Smart money transactions are tracked using this method (whales, sharks, syndicates, institutions, whatever the name people want to call him). There are two versions available: Pro and Lite. The lite version is a low-cost, functional mash. Only those with a M+ account are eligible to subscribe.

Risks of Day Trading

If you trade incorrectly, day trading can be pretty dangerous. Despite the fact that the requirement to make additional contributions to CFD trading has been removed, there is still the possibility of losing a significant amount of cash. As a result, when placing positions, select a reasonable position size. Many beginners, in particular, take too big a risk.

You should definitely use an automatic loss limit to protect your position (stop loss). This tool closes a position at a predetermined price or loss. The trader can always limit risk. In the end, the trader is the one who determines the risk. It is entirely up to him how much money he wishes to invest in the market.

The basic rule is that the greater the risk, the greater the potential profit. Create a trading strategy and set goals on a regular basis. In this regard, good risk management can be extremely beneficial. Professional investors put 1-2 percent of their total capital at risk in each position. Every day, high profits are possible with a good profit ratio.

Why Day Trade Stocks?

stock day trading

Why should you begin day trading?

As with any other trading style, there are advantages and disadvantages. In general, many traders are enthralled by the prospect of exchanging their own work for stock exchange trading. Simply spend your working hours in front of a computer to earn enticing money.

Profits are also realised quickly, which is an advantage. While longer-term investments may yield a few percent per month, a day trader earns his daily percentage. He also saves on swap costs (financing costs, interest) for leveraged derivatives, which accrue overnight. However, because of the high frequency of day trading trades, trading fees are generally higher.

Quick gains possibleHigher trading volume means higher trading fees as well
No overnight trading fees (swaps, interest payments)You will need very fast reactions and high brain capacity
It is not always necessary to sit for many hours in front of a computer because the goal can be achieved quicklyTrade with very fast algorithms and professional traders

Conclusion: Start Making Money by Day Trading Stocks Today

make money with day trading

Day trading is a legitimate way to enter the market professionally. However, one should not approach this subject lightly. It can take several years for a trade to become profitable. We can assure you that it will not work unless you put forth your own effort.

You may still have the best method for the market in front of you, but you must practise on a regular basis and understand how the market behaves at various points. You can make money even with the most basic items on the market. However, trading requires more than just the right strategy.

As a day trader, it is critical that you understand and practise the proper day trading strategies in order to have a successful trading journey. A successful day trader makes certain that they do not lose money recklessly, even if they are trading in small amounts, as this can be costly if it occurs frequently. We hope this article's guide helps you better understand the stock market and, as a result, helps you become a successful day trader.

The AskTraders Analyst Team features experts in technical and fundamental analysis, as well as traders specializing in stocks, forex, and cryptocurrency.