Day trading is stock trading confined to a single day. Because of pattern day-trading rules, you have to have an account balance of $25,000 to make more than three day trades a week. If you don’t have this balance, you need to be extremely cautious because buying a poor stock without a day trade left may destroy your balance.
Day trading is not investing; it’s speculating, like gambling. Day traders don’t trade shares because they believe in a company’s future; they trades based on the expectation of movement in either direction before the end of the day.
Day trading is not for most people. The $25,000 pattern-day-trading requirement is meant to be a deterrent for underskilled traders who do not have experience or excess funds to lose. Day trading is a form of gambling because it has a high-degree of uncertainty, which is risk.
Reading books about day trading won’t teach you how to be a day-trader, nor will you learn the financial skill of modeling and evaluating companies that must be taken via a thorough curriculum. However, you can learn technical analysis, which is the art of trading along momentum.
Below are books that will teach you how to become a day trader.
How to Day Trade for a Living: Tools, Tactics, Money Management, Discipline and Trading Psychology
Andrew Aziz is a engineer by training and a trader by profession. He is an Amazon author who has penned four different trading and investing books. This book is his beginner’s book on Day Trading. It acts as a good base of education for technical analysis contained within a one-day period.
Aziz makes it clear that day-trading is not a hobby or a way to get rich quickly. You can easily lose everything if you aren’t careful. You need to come to day trading as a student.
Charting and Technical Analysis
In order to trade you need to know how to read charts and perform technical analysis. Even though the book is seven years old, it’s one of the highest rated day trading books on Amazon with over 300 reviews. Expect to gain an understanding of charts, patterns, and how to predict the price movement of securities.
Technical Analysis: The Complete Resource for Financial Market Technicians
If you really want a in-depth book on trading, try to get your hands on a Technical Analysis textbook. Books written by single authors can be hit or miss depending on the author’s experience. Textbooks on the other hand tend to be written with groups of masters who routinely get their work checked by others and used by many.
Technical Analysis is a long book with over 700 pages of content. But if you want to be serious about trading, you need to learn as much as you can while also being patient.
One reason why Paper Trading is a good strategy for new investors is the ability to trade without risk. This way, you can make mistakes trading fake money instead of real money.
Although textbooks cost more, they tend to be of higher quality. Plus, you can usually purchase them used for significantly cheaper.
Technical Analysis For Dummies
For Dummies books have been around for years. And yet, through every technological innovation that occurred since the 90’s, Dummies are still here. These books are good for understanding basics before you dive deeper into a topic.
Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications
Another textbook on technical analysis. This book comes from the New York Institute of Finance. Technical Analysis of the Financial Markets is another behemoth of a book with over 500 pages of content. However, this book does an excellent job with chart illustrations making learning technical analysis a visual process.
Trading the Trends
Trading the Trends is another book by Fred McAllen, author of Charting & Technical Analysis, also listed in this article. Day trading is all about preparing for, and taking advantage of price trends within a day period. If you can recognize trends early enough, you can take advantage of them.
The Art and Science of Technical Analysis: Market Structure, Price Action, and Trading Strategies
The Art and Science of Technical Analysis attempts to connect academic market theory to real-world profits. The book cover may lead you to believe that this book isn’t academic. In reality, it’s an in-depth textbook full of theories, charts, and studies made to make you a better trader.
Advanced Techniques in Day Trading: A Practical Guide to High Probability Day Trading Strategies and Methods
Advanced Techniques in Day Trading is Andrew Aziz’s second and more advanced book on day trading. Before you begin learning advanced trading concepts you need to learn the fundamentals.
This book is a great extension for those who already have a concrete understanding of day trading and technical analysis.