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Is Day Trading For A Living Your Cup Of Tea?
from: LeeAnnaIf you like working with other people's money, then maybe day
trading for a living is what you should be doing. This type of
trading works daytime hours only, from the moment the stock
market opens at 9am until it closes at 4pm in the afternoon, you
can do a lot of trading in that amount of time. Or maybe you
want to do day trading for livings with your own money, that way
if you loose it, then you have no one to blame but yourself.
However, it may be a good way to watch your money grow too. The
following is the basic definition of what day trading is all
about. Maybe it is your cup of tea, maybe not, only you can
decide.
What is Day Trading?
Day trading for a living is when you take a position in the
markets with a view of squaring that position before the end of
that day. Day trading for a living mean a trader usually trades
many times a day looking for fractions of a point to a few
points per trade, however, by the end of the day he or she will
close out all their positions. The goal of the day is to
capitalize on price movement within one trading day. Unlike
investors, the day trader will hold positions for only a few
seconds or minutes, and never overnight.
What day trading really means.
The meaning of day trading is actually a misunderstood term.
True day trading means not holding on to your stock positions
beyond the current trading day, meaning your not suppose to hold
on to your stock overnight. Trading this way is really the
safest way to do day trading, this way one is not exposed to the
potential losses that can happen if the stock marked is closed
due to news that can affect the prices of your stocks. There are
many people out there today who are not very good "day traders,"
they are actually more like con artists just out to take your
money. Because of greed, they will hold your stock overnight,
setting themselves up for the catastrophic elimination of their
capital. In day trading currency, the term "day trading" changes
slightly. Because currencies can be traded 24-hours a day, there
can't' really be any overnight trading. You can have open
positions for longer than a day with active stop losses than can
be activated at any time.
There are a few different types of day traders out there today,
it can actually be subdivided into a number of styles.
Scalpers- This type of day trading involves the rapid and
repeated buying and selling of a large amount of stocks within
minutes or seconds. The goal here is to earn a small per share
profit on each transaction while minimizing the risk.
Momentum Traders- This style of day trading involves identifying
and trading stocks that are in a moving pattern during the day,
in an attempt to buy such stocks at bottoms and sell at tops.
The advantages of day trading for a living is there are no
overnight risks. Because positions are closed prior to the end
of the trading day, news and events that affect the next trading
day's opening prices do not affect your client's portfolio. Day
trading for a living has a greater leverage on your client's
capital because of the low margin requirements as their trades
are closed in the same market day. This increased leverage can
increase your client's profits if used wisely.
About the author:
Leeanna is an expert author writing for
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