In the world of the stock market, stock day trading is something many dream about doing and making a fortune with. It is definitely not easy money and luck does not really play a role in this 'trade'. Knowledge of some basic concepts is essential if you just don't want to rely on 'chance'. You don't need to be a mathematical wizard to calculate the risks involved ? and anyone with a fair amount of awareness of the stock market and common sense can participate in stock trading.

It is a fact that everyone is emotional about his or her money and no one wants to lose it by committing mistakes in stock day trading. To avoid such mistakes, a few basic concepts have to be committed to memory for a fruitful stock trading experience. Learning about the market, its composition and its behavior is essential for any trader to succeed in stock trading. For example, you should know the terms associated with the different types of stocks in the market before you jump into stock day trading. Here they are:

Blue Chip: This is a stock of a traditional company that has been around for many years and is well known among investors. It is usually assumed that blue chips are stable companies and solid investments. Some conservative stock traders only use blue chip stocks to day trade even though this is not essential. Coca Cola and General Electric are two common stocks that are considered "blue chips."

Growth Stock: This is the stock of a firm that is experiencing above average increases in revenues and earnings. Growth stock traditionally do not pay dividends and instead reinvest the earnings in the company itself. Dell and Intel are some well-known names that have been considered "growth stocks" in the past.

Income Stock: This is a kind of stock that has above average dividend yields. Unlike growth stocks that retain most of their earrings, income stocks make larger distributions to its shareholders. Many banks and utility companies can be considered income stocks.

Defensive Stock: This is a kind of stock that is traditionally better at weathering a market storm. Defensive companies make products that people cannot do without, such as medication, household products, food, etc. As a result, defensive stocks should perform better when the economy is not doing well overall. McDonald's and Gillette are examples of defensive stocks.

Learning these terms is just skimming the surface of stock trading. There are a number of other useful terms used in trading that you should know, such as Bid, Ask, Last, Change, Hi, Lo, Volume, Orders, etc. Having knowledge of the basic stock market terms and concepts is one of first steps to becoming a successful stock trader.