Not much of a day trader but I'm looking to learn more - any general tips for a day trading novice?

EthanR answered one year ago …

I have to disagree with MNSL on this one, as I do a lot of day trading myself, and definitely feel there are merits to it. I will offer you several caveats though.

1) Only use money you can afford to lose. Don't use your rent money!
2) Read as much as you can on the subject before you even risk one dime
3) Although it's not exactly the same, paper trade for several weeks just to get the feel for it.
4) Never risk more than 5% of your total capital on any one trade
5) Always know in advance your exit price, whether that's on a gain or a loss, and stick to it.
6) Never trade when you are sick, upset, or distracted by other things
7) Do not day trade until you are debt free, have a reserve fund, and have already funded your IRA for the year.

Remember, you will have to keep excellent records for taxes. Some brokerages, such as Fidelity, will do that for you, but not all. Also keep in mind that your profits are taxed as ordinary income, not as long term capital gains. And if you are day trading the same stocks frequently, you will lose the tax benefits on losses you sustain, due to the 30 day wash rule.

Sounds difficult. So why day trade? Because what could be as satisfying as making a few hundred or a few thousand dollars in 5, 10, or 20 minutes? What could be more satisfying than being able to take the meatiest part of a stock move for profits, then either short it back down, or just wait for it to correct before re-entering your position? Even with taxes and commissions, you can often improve on what you would have gained by simply sitting with the position long term. But it takes a lot of time, skill, patience, and practice.

A few sites you must have in your favorites for daytrading, www.stockcharts and www.cnbc.com
My favorite book: Dr. Alexander Elder, "Trading For A Living". You will also need a good software program with real time streaming quotes, intraday charts, and technical indicators. Fidelity has one, and I'm sure there are other brokerages that have them as well.

On this site, you will find an article which I wrote with fellow Tickerhound member, ChaosNantuko, called "A Short Term Method For Shorting Stocks". Feel free to check that out as well.
Good luck!