Day trading has become an online phenomenon in the last year which has resulted in manuals and courses on how to successfully day trade. Day trading is the buying and selling of a stock on the same day hoping to make profit from any small increments in price.

Brokerage houses offer 2 month seminars on how to day trade, such courses costing a few thousand dollars.

While day trading has become popular, the characterizing of day trading as another mode of investing may be overstated. Day trading is tantamount to gambling and some brokerage houses have been guilty of overstating day trading as safe and risk-free. For the sophisticated investor day trading may be safe since such investors know what they are doing and are willing to absorb the risk of losing money.

Novice investors do not know what they are doing and brokerage houses' misleading claims of quick money, low risk and promises of early retirement, can lead novice investors down the road to losing life savings.

Before engaging in day trading, keep the following in mind:

• Day traders usually buy and sell on stock price momentum usually disregarding the fundamentals of the underlying stock company. The inherent risk in this, is that the day trader is hoping that his stock will rise without knowing whether the price should be rising based on the quality of the underlying company.

• It takes tremendous discipline to be a day trader. Discipline to sell a stock that is rising and more important discipline to sell a stock when it is falling. Day traders will set limits of when to sell a falling or rising stock. Selling a stock that has lost money is difficult because typical investors want to hang on hoping that the stock will rebound. As the price continues to fall, the desire to hang on gets stronger and stronger, until a great deal of money has been lost. If you can't set and stick by predetermined selling points, day trading is not for you.

• Your expectations of day trading must be realistic. A day trader must be realistic about the amount of work, discipline, tolerance to risk and luck that is needed to be successful.