| Day trading is a term that can mean different things | | | | moves every day, whereas Vodafone is only 130p |
| to different people, but in relation to shares it is | | | | and doesn't really move that much during a given |
| basically where traders try and make small profits | | | | trading day. |
| from share movements within a single trading day. So | | | | Even if you do only trade these larger shares though, |
| at the end of the trading day all positions will be | | | | it is still difficult because the larger companies will |
| closed out and no positions will be held overnight. So | | | | very often move in line with the wider market index. |
| is this an easy way to make money? | | | | So if you are trading an individual share you also need |
| Well I have been involved in the trading industry for | | | | to keep your eye on the FTSE 100 index or the |
| over seven years now and in my opinion this is one | | | | Dow Jones, for example, depending on which shares |
| of the hardest ways to make money. Trying to | | | | you are trading. The wider markets can be very |
| squeeze profits out of the stock market is certainly | | | | unpredictable and are heavily affected by the |
| not easy because for a start you have the spread to | | | | economic data announcements, so all of your analysis |
| overcome. So whether you trade shares through a | | | | on a particular share can quickly go out of the |
| spread betting company or a CFD provider, for | | | | window if a major market-moving announcement is |
| instance, or if you actually buy the physical shares, | | | | made during the day. |
| you need to make a few points just to cover the | | | | There are of course tools you can use to help |
| spread and break even. | | | | generate profits such as technical analysis and Level |
| This is easier said than done because there are some | | | | 2 data but I have never found them to be very |
| days when the market is extremely quiet and the | | | | reliable on such a short-term basis. My general advice |
| shares in a particular company will barely move. So if | | | | would be to forget about day trading shares and |
| you are going to trade shares on an intraday basis | | | | instead lengthen your time frame and look to trade |
| then you really need to be focusing on the more | | | | shares over multiple days or weeks. This is far easier |
| volatile shares, and ideally the more expensive ones. | | | | to do, particularly if you use technical analysis, |
| For example although Vodafone and Rio Tinto are | | | | because that way the daily market swings are not |
| two of the biggest UK-listed companies, it is Rio | | | | so important and the spreads are a lot easier to |
| Tinto that is the easier to trade because it is | | | | overcome. |
| currently priced at around 2000p and has big price | | | | |