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What an expert trader thinks about day trading?
Perhaps you are aware of all the media hype about day trading, but still don't know exactly what it is. In summary, it is daily, online stock trading with very short investment horizons.
Day trading is the buying and selling of various financial instruments, like futures, options, foreign currencies and stocks, with the goal of making a profit from the difference between the buying and the selling price. Day trading also has different types of trade, such as trend trades, counter-trend trades, and ranging trades. There are several markets for day trading like currency, stocks, futures and commodities.
An example how day traders works
For example, at 10:00 AM a day trader might buy 1000 shares of a company just as the price begins to appreciate on good news, and then sell it at 10:06 AM when it's up by $0.60. The day trader makes $600, excluding commission and taxes.
1. Day traders typically suffer extreme financial losses in their first months of trading. Most of the new traders never graduate to profit-making status.
2. Day trading is an extremely demanding and expensive task.
3. Day traders depend heavily on borrowed funds or buying stocks on margin
4. Day trader should not believe advertising claims, which promise quick and sure profits from day trading.
5. Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business. It's necessary to check out day trading firms with your state securities regulator.
6. You need to work with an experienced day trader, need to learn latest techniques, use latest stock market investment software, subscribe to online day trading tutorial and need to devise your own trading plan. Your own strategy is the biggest secret of a successful day trader. This is true whether you are investing in equity or currency market. Options Trading Blogspot
Options Trading Blogspot - Do You Want to Take Day Trading as a Full Time Job?
