Exploring the World of Day Trading
Are you looking into a career in day trading? In the past, the tools for day trading were available only to professionals. But thanks to the power of the Internet, everything you need to get started is now conveniently online. If you have a nose for business, guts and a sharp instinct for how the market shifts, the maybe day trading is the job for you.
What is day trading? Basically it is daily, online stock trading with very short investment. The individuals who do this day in and day out are called traders, not investors in the traditional sense. A day trader is someone who will buy a stock that has high volume and liquidity and will sell that same stock within a few minutes up to a few hours.
Day trading happens only during the day. Those who do day trading usually stay glued in front of the computer and monitoring which stocks have a fast turnover. During the day trading, they quickly buy a large number of stocks at a time and sell it once they see the stock gain within the day. Day traders will make a purchase of a stock, hold it for only minutes watching constantly for the stock to go up or down, selling if it goes down only two or three cents and holding if it goes up to about five or six cents and selling. The stock is almost never held over night as there are many other opportunities and a stock that takes hours to move is not worth holding.
Day trading can be a very high paced and stressful lifestyle. There are millions of day traders across North America but it can be a very fast way to lose everything. Some people are making over $5000.00 a day but it takes months and sometimes years to learn and master day trading.
The broader meaning of the term day trading includes those who trade daily from their homes or offices, through Internet brokerages. These day traders might buy and sell stocks in minutes, but might also hold some overnight or longer. The latest buzzword for this is "swing trader," those who keep a stock within in a few days before finally selling them. To some, particularly the so-called bandits, day trading is just a numbers game. They do little research and just watch for moving stocks with good spreads. Others are more scientific about it, relying on news and technical analysis to catch everyday price fluctuations.
Day trading requires a certain amount of capital. Generally, day trading should have enough trading capital to buy at least 1000 shares of any given stock on any particular day. There are very few stocks priced under $20 that have the degree of liquidity necessary to make them suitable for day trading. This means that a novice day trader should normally have day trading capital of at least $20,000 to start. In addition, the new day trader should treat this as 100% risk capital and should not have to unduly worry that the whole amount of this capital may be lost very quickly.
You must also be aware that not all stocks are suitable for day trading. Day trading should never trade unlisted or thinly traded (low volume) stocks. These stocks have poor liquidity and hence a higher price volatility. This may make it hard for you to exit your day trading position quickly at a fair price. Trade only high volume, well-known stocks.
Michael Sanford has a wealth of trading knowledge available at the stock market and day trading resource center.
Latest News
Currency Trading Markets Remain Highly Correlated to Dow Jones ... Daily FX, NY - Currency trading markets continue very highly correlated to broader risky asset classes, as the common theme of financial market deleveraging creates strong ... Currency Trading Markets Remain Highly Correlated to Dow Jones ... |
 Maktoob | Yen Falls on Speculation Japan Investors Buying Overseas Assets Bloomberg - ... for overseas investments,'' said Motonari Ogawa, director of currency trading in Tokyo at Barclays Capital Inc., a unit of the UK's third- biggest bank. ... Drop in Stock Market Sends Traders to the Safety of the US Dollar Yen Rises on Speculation US Lawmakers Will Block Auto Bailout Dollar Falls Versus Euro as Rally Fades on Recession Prospect |
NXP Semiconductors Trading Update MarketWatch - ... and expected future trading levels, we now foresee a 15% to 25% sequential sales decline in the fourth quarter on a business and currency comparable ... |
Attention Forex Trading Professionals: Forex Justice Takes the ... PR Web (press release), WA - The forex currency trading industry is replete with fx brokers and scammers ready to make dishonest trades and give you misleading advice about forex ... |
Planet Payment Begins Trading on OTCQX Market as PLPM MarketWatch - ... multi-currency payment and data processor, announces that effective 9.30 am EST today, November 19, 2008, the Company's common stock will begin trading ... |
 AFP | WSJ(11/11) Currency Trading: Bad Crop: Commodity Currencies Alibaba News Channel, NEW YORK - In currency markets gripped by turmoil, investors have targeted one group for special punishment: big commodity exporters. This cluster includes the ... Value Plays in Equity Markets Help Support Euro Rally Euro firms against dollar, pound sinks amid credit turmoil Yen Falls Most in Two Weeks Versus Dollar, Euro as Stocks Rally |
PB Futures Selects Orc Software to Provide Low Latency Access to ... MarketWatch - ... currency and commodity futures/options for customers worldwide. The company is committed to providing clients with advanced high performance trading ... |
 The Moscow Times | Russian Central Bank Spent $58 Billion Backing Ruble (Update1) Bloomberg - The bank buys and sells currency to keep it within a trading band against a dollar-euro basket to limit the impact of exchange-rate fluctuations on the ... Minister: vast reserves protect Russian economy WRAPUP 1-Russia FinMin says mild rouble weakening right decision Russia spends $3.3 bln on stock/bond purchases |
SKorean stocks fall sharply after Wall Street drop The Associated Press - In currency trading, the South Korean won dropped 3.4 percent to close at 1497 to the US dollar. The won has declined 37 percent against the greenback so ... South Korean won plunges to new multi-week lows against dollar and yen Amended: South Korean market sharply lower in early trade |
Euro falls as US stocks slide guardian.co.uk, UK - ... my sense is that a lot of people have taken their toys and gone home," said Firas Askari, head of currency trading at BMO Capital Markets in Toronto. ... |
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