Substance Of Day Trading

By: Stapin Brown
Day traders are people, who depend on day trading for their livelihood, and are independent detached from the office routine and consider day trading to be the pavement to financial freedom. Day trading is not for the gamblers looking for short-term excitements in the markets or the academic researchers who interprets day trading theoretically.

To be successful trader in day trading you need to have the strong mind, solid discipline and IQ. It is important not to dwell with the concept that Day trading can make you rich very fast. Constant research, calculation and practice on various techniques finally train you to go for day trading.

Day Trading refers to strictly trading within the day and there are no rules against holding overnight but risk is minimized if trading is strictly restricted to within the day. The time frame and the methodology employed differentiate day trading from investing. Unlike day trading, investing requires a much longer time frame from months to years to decades.

In order to escape bankruptcy of the company the very next day you purchased it you need to analyze the fundamentals of the companies, its financial health and advantage over the other company. Here is some of the info that every investor should know about day trading:

1. Risk only the money they can afford to lose and not let their adrenaline rush risking all the money they will need for daily living expenses, retirement, take out a second mortgage,or use their student loan money for day trading.

2. Never make a mistake to own any stocks overnight because of the extreme risk of fluctuation of prices one day to the next, leading to large losses.

3. Keeping a close watch on the market continuously during the day on their computer transit is extremely stressful and demands great concentration to watch dozens of quotes and price fluctuations to spot market curves. Day traders also have to go through high expenses including the payments of large amounts in commissions for their firms, training, and computers.

4. Day trading strategies demand using the leverage of borrowed money to make profits proves to be disastrous when they lose all their money.

5. Believing advertisement that screams quick and sure profits from day trading will be fool of you. Make sure to count the number of clients who lost and have made profits.

6. Remember to find out whether the educational seminars, classes, and books about day trading stand to profit if you decide to start day trading.

7. Check out day trading firms with your state securities regulator by calling your state securities regulator and at the same time collect information about the problems if the firm has ever faced.

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