Facts of Day Trading
Are you thinking of entering the fast-paced world of day trading? Arm yourselves with the information from this fact sheet on day trading.
What is day trading?
Day trading is an investment tactic that does online daily stock trading with a relatively short investment. Those who do day trading usually buy and sell securities during the same market day and, as a general rule, do not hold stocks overnight. Many day traders make dozens of trades every market day hoping to capture profits that arise from small intraday price fluctuations.
How is day trading different from swing trading?
Day trading relatively holds the stock for only the day. After the stock market closes, a day trader has no stock in his hands. Swing trading holds a stock for at least a few days, waiting out for the best price before dumping it back to the market. Day trading is much more stressful and requires guts and a keen business sense. Once you get good at day trading, you can earn up to $50,000 from your initial investment.
How much capital would you need for day trading?
You need an investment equivalent to buy 1000 stocks. That is roughly around $20,000. Because the chances are small that you will find a marketable stock with a price of under $20, this is enough to get your day trading underway. However, you must remember that this is a 100% risk capital so do not worry too much if you lose this amount very early.
What are the general rules for day trading?
- Always trade with the trend.
- Cut losses short
- Never get emotionally involved in your trades.
What are the most suitable stocks to trade for day trading? It is advisable to trade high volume stocks. Go with the trend with the popular stocks available. It'll be easier for you to sell those stocks at the end of the day trading.
How does a usual day trading transaction occur?
For example, at 10:00 AM a day trader might buy 1000 shares of stock XYZ just as the price begins to rise on good news, then sell it at 10:04 AM when it's up by 1/2 ($0.50). The day trader makes $500, minus commission. With today's cheap commissions of $29.95 or less per trade, that's a quick $440.10 or better, excluding taxes.
Most people who deal with day trading spend all of their time in front of the computer, watching the slightest change in the stock price. As the prices go up and down, the day trader must be alert as to when to sell his stock or wait for the moment to hold on it. This can be a very stressful lifestyle as a mere second could mean an increase of half the stock price and missing that moment for any person engaging in day trading could mean a loss on his investment.
Day trading is not a get rich scheme. It is serious business where you could lose everything within minutes because of wrong information. Before jumping into day trading, remember to do your homework first. Go to seminars on day trading, use simulations if possible and practice reading market indicators. To be a successful day trader, don't just need luck. Knowledge and experience counts. Welcome to the world of stock markets and investments!
For More Information and articles about day trading check out the forex trading center.
Latest News
Currency Trading Market Conditions Remain Challenging: Breakout ... Daily FX, NY - Sharp US Dollar gains have produced profits in several of our currency trading strategies on the week, and a continuation of US Dollar strength would make ... US Dollar Forecast to Rally Against Euro, British Pound, Fall ... |
 Voice of America | Treasury’s Lead Role in China in Flux New York Times, United States - Besides, some noted, China’s currency, by maintaining its peg to the dollar, has risen in relation to the currencies of other trading partners because the ... Yuan's Fall Watched Ahead of US-China Summit China hopes talks with US boost coordination Paulson Seeks to Broaden Access to China |
Stocks drubbed at open CNNMoney.com - US crude for January delivery tumbled $3.46 to $50.99 a barrel on the New York Mercantile Exchange. In currency trading, the dollar fell against the yen and ... |
 Maktoob | Yen Strengthens as Manufacturing Slump Weakens Yuan, Ruble Bloomberg - Bank Rossii, which manages the currency against a basket of dollars and euros to mitigate the effect of currency swings, widened the ruble’s trading band to ... Dollar Rises as Global Manufacturing and Stock Markets Plunge Down Is Dollar's December Direction Yen Extends Gains as Signs of Global Recession Sap Carry Trade |
Yuan Falls to One-Month Low as China Seeks to Shore Up Economy Bloomberg - “The central bank may want to test the market’s response to the possibility of a weaker yuan, but most likely it will keep the currency stable till the end ... Yuan tumbles to end at bottom of band vs dollar Yuan posts record low against dollar Rate cut sees yuan decline |
 New York Times | Some Nations That Spurned the Euro Reconsider New York Times, United States - After turmoil in the currency markets nearly destroyed the currencies of Iceland and Poland, the two countries are rethinking their opposition to the euro. ... |
AU Preview: Q3 GDP Should be Bo... ForexTV.com, NY - Forex (or FX or off-exchange foreign currency futures and options) trading involves substantial risk of loss and is not suitable for every investor. ... |
GLOBAL MARKETS-Grim economic outlook pummels stocks, oil slides guardian.co.uk, UK - ... also lifting the dollar, so it's possible the dollar will get a bit of a bid out of this, but currency trading is going to be choppy," Reid added. ... |
Ruble Plunge Prompts Doubling of Reserve Spending, Survey Shows Bloomberg - Bank Rossii buys and sells foreign currency to keep the ruble within a trading band against a basket comprised 55 percent of dollars and rest in euros. ... Russian Stocks, Ruble Drop as Production Falls More Than in ’98 |
China's currency falls by record against US dollar MarketWatch - The yuan eased to 6.8848 against the dollar, falling to its 0.5% trading limit, its lowest level since May. Against the dollar, the Chinese currency was at ... Chinese market closes higher Manufacturing Contracted At The Fastest Pace In 25 Years During ... |
Resources
-
Simple Forex Solution.
eBook on Currency Trading.
-
Forex Trading Strategy
How to trade Currency pairs
-
Global Forex Currency Trading Portal
Global Forex Currency Trading Portal, Free Forex News, Research, Trading Systems, Strategies and Education
-
Forex Trading Tips - Learn how to trade EUR/USD, USD/CAD or any other major Currency pair.
Stock index Trading strategy for beginning and experienced traders alike.
-
Become a High Earning Currency Trader
Become A High Earning Currency Trader by Tapping a Few Buttons on your PC
-
Forex :: FXTrader.NET - The professional Forex Trader - Forex Managed Accounts for private and insti
Forex Managed Accounts Forex Currency Trading Services Forecast Products
-
Get Rich Trading E-Currency! Get The Free Ecurrency Report!
Instantly Cash In On Your Share Of This Multi Million Dollar Industry With Your Very Own, Shockingly Explosive Ecurrency Trading Business.
-
Currency Exchange Profits Video Training
Currency exchange profits | Video training for e-Currency Trading
-
Day Trade Forex System:
The ULTIMATE Step-by-Step Online Currency Trading Course
Day Trade Forex Systems: Online Currency Trading Course, Advanced Trading Signal System and the Euro Fractal Trading System. Forex traders using our forex advanced signal system with specific entry and exit strategies can win trade after trade in the for
-
Foriegn Currency Trading | Online Forex Trading | Forex Trading System
Online Forex Trading System Ebook