Daytrading Guide 2021

Day Trading Quickstart Guide

Day trading is the fast-paced process of buying and closing financial positions within the same trading day. The idea is to pinpoint price fluctuations in markets and profit from what traders call “speculative trading”.

If you want to get started and discover what the buzz is all about, you’ll need to master the basics of day trading and how it works, establish a trading strategy and open your first position. Our day trading guide will walk you through each step in closer detail, helping you get set up and started today.

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A Beginner’s Guide To Day Trading Online: What Is Day Trading?

Day trading is one of the UK’s most popular trading styles and is based around the concept of speculative trading. Put simply, this just means making informed predictions on market fluctuations and trying to profit from changes in price or value. As the old saying goes, you should always “buy low, sell high” – but day trading can be very high risk and there is a little more to it than that.

How does day trading work?

Day traders tend to target stocks, commodities, futures, currencies and options with the intention of holding a position for just a matter of hours – or even minutes – before closing. There are two positions that can be held – a “long” position, which refers to buying an instrument and trying to benefit from price increases, or a “short” position, which is more like betting against the market, or trying to predict value losses.

The idea is to look for volatility or short-term price movements that could offer a quick money-making opportunity. Any day trading quickstart guide will tell you that the trick is targeting the right markets and establishing the best day trading strategy – but more on this later.

What markets are best?

Most day traders focus on markets that have fixed closes, which are the kind we will focus on in this guide. This means that positions must be closed either at the end of the day or at another fixed time to help traders to avoid “gapping risk” – the period when financial instruments could be affected by unpredictable overnight news or market developments. Popular markets for day trading include:

  • Stocks and shares
  • Indices
  • Forex

We’ll explore each of these markets in greater detail a little later on.

How is day trading different from other investment strategies?

The main difference between day trading and other types of trading is the “day” part. While other traders will rely on benefitting from price fluctuations over longer periods of time, day traders will buy a financial instrument by morning and close on that position by the end of the day.

Sometimes, experienced traders will buy and sell multiple assets on the same day. That said, our day trading guide for beginners would encourage newcomers to stick to one financial instrument at a time at first.

Daytrading Guide: How Can I Get Started?

No proper day trading guide for beginners would be complete without a good rundown of the key things you need to get started. Here in the UK, you can get started using the following five-step process:

Research which markets are available to you

Beginners should stick to markets with fixed closes and consider shares, indices or forex – which tend to be the most popular, tried-and-tested day trading markets.

Choose your preferred market

Once you’ve decided which market best suits you, it’s time to start tracking its performance. Keep a watchful eye on the latest news and try out analytics sites and trading tools, too.

Decide on a solid day trading strategy

Popular strategies include trend trading, swing trading, scalping, mean reversion and money flows. We’ll review how each works in the next section.

Find a broker and open an account

The next step involves finding a broker or online trading platform that really works for you. Some, like IG, offer newcomers a demo or trial account as a taster, but others might offer more favourable terms in the long run. More on this later.

Monitor your market and secure your first position

Once you’re all set, it’s time to identify an investment opportunity and take out your first position. Be sure to plan ahead, keeping in mind that you’ll need to sell before the day’s end.

Daytrading Guide: What Are The Key Things I Need To Know?

Day trading is a high-risk business. Before you dive in, you need to make sure you fully understand the factors that impact day trading, so you can safeguard yourself from making the wrong decisions. The key factors you’ll need to monitor to make your decisions go the extra mile, include:

Market volatility

Market volatility is what you’re looking for first and foremost when buying and selling. It refers to how quickly an asset’s price is moving or fluctuating. The more volatile an instrument, the greater opportunity for making short-term profits.

Asset liquidity

It’s not all about volatility – liquidity is important too. This refers to how quickly investors are able to enter and exit a financial instrument. We would advise newbies to look out for high liquidity, as being able to close quickly is crucial for day traders. The last thing you want is to be stuck with your assets overnight and left exposed to gapping risk.

Volume of trading

Just as high liquidity is important, you also need to look for assets that are being traded in high volumes. Lots of trades means that the asset is generating a lot of interest from other investors and is probably worth your while.

Daytrading Guide: Finding And Choosing The Best Markets

Let’s take a closer look at the three most common day trading markets – shares, indices and forex – and what these offer to newcomers.

Stocks and shares

Stocks and shares are one of the best-known and most popular instruments traded in the financial sector. These are individual company investments separated into “large” and “mid-cap” variants, which tend to fluctuate in value by at least a few percentage points each day. With this in mind, day traders should keep tabs on the most heavily traded stocks, or those that are likely to be affected by big political or news events if they want to best benefit.

Stocks are ideal for newcomers due to their restricted opening hours and the relative ease of tracking what media attention individual companies are getting.


Any good day trading quickstart guide is likely to recommend indices to newcomers, which follow a similar trading pattern as stocks and shares in that the market has its own opening hours that help day traders avoid gapping risk. The key difference is that, with indices, traders are making predictions about groups of shares rather than just one company, such as the FTSE 100 or FTSE 250, which respectively represent 100 and 250 different high-ranking companies on the London Stock Exchange, for example.

Indices are a great way to gain wider exposure to markets and boost your confidence. They are also relatively easy to track using various apps and tools.


In a slight departure from traditional stocks and shares or indices, the forex market focuses on the trade of currency pairs and the ease at which various world currencies can be bought and sold at any one time.

Our daytrading guide would recommend Forex to newcomers on account of the fact not much capital is needed to get started, and good strategies can help traders make between 5% and 15% thanks to leverage. Check out our Forex guide for more information.

Daytrading Guide: What Strategies Can I Use?

The number one rule of day trading is simple: never keep a trade open overnight. That said, while extensive research and monitoring of your desired market is crucial, it’s equally important to follow a tried-and-tested strategy when buying and closing on your financial instruments. Time to take a look at some of the best day trading strategies and tools you can use.

Daytrading Strategies For Beginners

Trend trading

Trend trading is all about following trends in your chosen market – that is, the direction asset prices are generally going over a period of time.

This strategy is popular among longer-term traders but can benefit day traders too, as you can easily pinpoint upward trends and buy and close quickly to take advantage of escalating highs.


Our daytrading guide wouldn’t be complete without mention of scalping – a short-term strategy best known for having a high win rate for day traders.

This strategy focuses on making several smaller profits on multiple assets as opposed to one or two big wins. This is achieved by buying in bulk and closing your positions quickly before each trade starts to bear the brunt of overnight funding charges. It might be better suited to those with a tad more experience.

Swing trading

Swing trading is similar to trend trading, but with a much more short-term focus. This strategy relies on monitoring analytics for price patterns in the here and now, such as hourly or twice-hourly fluctuations.

The idea is to pinpoint minor reversals in market values to figure out when to buy and close accordingly. So, a pro tip would be to think small and act fast.

Mean reversion

Without getting all mathematical, mean reversion is all about price-to-earnings (P/E) ratios and the concept of averages.

The idea is that these ratios will always move back to their mean value sooner or later, so traders should keep an eye on any instruments whose performances have strayed away from the norm and take advantage of their reversion to the so-called mean.

Money flows

By this point, you should be aware that volume is equally important as price when day trading. This is why the money flows strategy focuses on monitoring which assets are being oversold or overbought at any one time. This involves comparing today’s trade numbers with yesterdays to spot positive and negative money flows.

Generally speaking, overbought conditions with low readings suggest oversold market conditions – which could mean cheaper prices. Conversely, high readings suggest overbought conditions, which typically mean it’s time to sell, sell, sell!

Day Trading Quickstart Guide: Tools For Beginners

Once you’ve chosen a winning strategy and are feeling 100% happy with everything you’ve read in this daytrading guide, it’s time to find a day trading platform, tool or broker that suits your unique needs. Here are some popular platforms for newcomers:


IG offers low rates, intuitive trading tools and easy-to-digest research, making it a good choice for newbies. It uses a basic commissions structure and offers some great apps, too

Saxo Markets

UK day traders can access more than 30,000 international products across 36 global exchanges with Saxo Markets – making it one of the most extensive brokers available.

Interactive Brokers

Perfect for less-experienced traders, Interactive Brokers offers low commissions, excellent research and a client portal that’s pretty much idiot-proof to use – spot on for anyone still coming to terms with daytrading.

Hargreaves Lansdown

A great choice for anyone who wants the maximum number of investment options available, Hargreaves Lansdown is both thorough and trusted in its field. Consider its services if you’re feeling a little more confident.

How Much Do I Need To Get Started?

When you’ve found the right provider for you and opened an account, you’ll need a minimum balance before you can day trade stocks. We can reveal that this limit usually sits around £250 – unless you’re using a broker like IG that offers a demo or trial period with “virtual funds”.

With most platforms, if a trader’s balance drops below the broker’s limit, they’ll have to make a second deposit to keep on trading – so it’s important to keep your balance up.

How do I open my first position?

Once you’ve registered with a trading platform or broker, you can open your first position by following the tips outlined in this guide: research and choose a market, decide on a strategy, keep your eyes peeled for opportunities and secure a position on an asset that meets your budget and expectations.

How do I stay safe?

Day trading is a high-risk business, as our daytrading guide has already outlined. The good news, however, is that it is 100% legal in the UK – and safe as long as you stick to the right platforms. This is why choosing an approved platform, like those mentioned above, is vital.

You should take steps to ensure your broker is properly registered with the Financial Conduct Authority (FCA) before you get started, as FCA-regulated companies offer important protections for consumers. It’s relatively easy to cross-check a platform using their website online.

Daytrading Guide: Final conclusion

We’ve tried our best to deliver a beginner’s guide to day trading online, but with such a complex topic it’s always wise to do your own wider research before jumping in – especially when it comes to understanding your desired market.

If you take three things away from this guide, let them be:

  • Never lose sight of market volatility, asset liquidity and volume of trading – as these are key indicators of when to buy and close.
  • Select a strategy that works for you – and stick to it.
  • Choose a broker that meets your unique needs, whether those be easy to use apps, gaining access to more markets or having a trial or demo period to help you get a feel of things first.

And remember, day trading takes time and patience to master, so don’t expect to be an expert on your first try. Happy trading!

Remember, we’ve got plenty of other trading guides for you to sink your teeth into. Always wanted to know the answer to “what is a lot in trading?” or “what is a pip in trading?”, then get reading out latest guides!

Daytrading Guide FAQ

👛 How much money do I need to day trade?

Starting out fresh as a day trader can be confusing and oftentimes frustrating if you don’t know what you’re doing. It’s important to familiarise yourself with how day trading works and how much money you’ll need to get started – and it’s equally important to check out the latest news for tips and advice on what’s hot right now and where to trade. Visit for the latest tips, strategies and more.

💰 Can day trading be a side hustle?

Much like mastering sports and casino betting, perfecting your day trading techniques takes time and practice, which is why it’s wise to shape up on your skills before diving right in. You’ll need to fully understand the ins and outs of day trading and how deposits and balances work. It’s also absolutely vital to closely follow the latest news and trading guides, and keep your eyes peeled for good trading opportunities.

🤔 Is day trading worth it?

Anyone who’s dabbled in financial markets before will know that day trading isn’t for everyone. While some savvy traders keep an eye on the latest news like a hawk and have a natural talent for spotting amazing investment opportunities, others find the whole process laborious and confusing. Deciding whether day trading suits you is something you can only do on your own, but is always here with the latest tips, strategies and info to help you along the way – including all the answers to “what is forex trading?”.

💸 Can I start day trading with £500?

Just as the best sports betting and casino sites often require minimum deposits before you can get started, day trading also has its very own strict rules and regulations. Ordinarily, a minimum balance is required to day trade stocks – and if a trader’s balance drops below this amount, they’ll have to make a second deposit if they wish to keep on trading. Visit to get the latest info on cheap online brokers for day trading.

🤑 Which day trading platform is best?

With so many amazing online brokers and trading platforms on the market, finding the right one to suit you isn’t always easy. Sure, you can keep an eye on the latest news and developments to see which sites are getting the best press, or you can read online reviews and comparisons to see what other traders are saying – but you just can’t beat testing out a trading platform for yourself.

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