• Discipline is necessary for success in day trading because 90 percent of day traders fail.nachrichten image by Angelika Bentin from Fotolia.com
  
  Intraday or "day trading" is an approach to investing in stocks, futures, or other investment products that relies on numerous intraday buy and sell trades. As opposed to investments intended to derive profit over a period of time, intraday trading relies on quick, accurate, and well-timed entrance and exit of positions.
  
  

Buy the Higher Low

• A common signal of an overall upward (or downward) trend pattern in a stock is when prices move up and down, but each move down sees a higher low point, and each move up sees a higher high point. On a technical chart, this is what establishes an upward trend over a short, medium, or long period of time. One approach to intraday trading that carries with it a modest risk and good upside is to follow a stock that is trending upward and buy it just ahead of its previous low. Place a stop-loss order just below the previous bottom and exit with gains just ahead of, or after the previous high. If you are wrong and the price is moving downward, your losses are minimal. If you are correct, you can achieve solid gains.
  
  

Use Tight Exit Spreads

• According to Tsunami Trading Educators, Inc., 90 percent of traders lose money. This is largely due to the inability of many to exit losing positions and avoid losses. No trader wins on every trade, so cutting losses early and optimizing winning trades is key. One day trading approach, referred to by Trading Smarts as the "Day Tripper" strategy, is to pick a stock that appears primed for an upward move on the day. Buy the stock at a low price, and exit (sell) immediately on a (preferably) one cent, two cent, three cent,or other tight, predetermined drop in price. If the market price moves up on your buy, follow the stock until it drops (by your one cent or other predetermined spread) again and sell for profit. This minimizes losses substantially and enables you to "ride" a stock that moves upward.
  
  

Read Trendlines

• Trendlines are lines drawn on a stock (or other investment position) chart to indicate the overall direction of a stock. Trends form over short, medium, and long-term timeframes based on the ongoing up and down price movement. Generally, an upward trend is noted when moves down see higher low points than previous moves, and moves up see higher high points. Selecting stocks with clear direction makes it more likely you will make winning trades. Find a stock that appears to be approaching the bottom of its upward trend line. Determine a buy-in price at the trendline bottom. Set a stop-loss order with a tight spread to reduce losses and determine a sell price based on recent and intraday trend patterns. Research tools offered by brokers and investment sites often provide short-term resistance data points.