Smart Tips For Day Trading
What is day trading? Doesn’t everyone trade in the day? Well, traditionally yes, but the day trade is the financial term for when a trader or investor does his buying and selling of commodities or financial instruments on a single market day. It is, literally trading on a day-to-day basis, as all positions and transactions made on that day will be closed before the market closes on that very day. A trader can day trade practically any commodity, be it futures, interest rates, commodity futures, equities, stocks and bonds and even the Forex market.
For the Forex market – which is a true 24 hour market, day trade is when a trader chooses a certain continental market to trade in, and liquidates his investments on that particular day – for example, someone in Europe could be trading the Asian market exclusively in the EUR – USD commodities (currency), and thus wins or loses on a daily basis. The trading day starts once more the next day, and the next, so on and so forth. While the day trading option is the mainstay of casual investors who usually do this at home or on leisure time, it is also the gold standard of banks and financial institutions. Day trading might be a prudent strategy for novice traders seeking low risk, but there are a few things any trader should know in order to day trade the smart way.
You have to be able to look at the trade frequency of any commodity that you choose and you have to plan strategies way before hand to look for potential trading setups so that your options are open when you start to speculate in the market. Having a good strategy and knowledge of aspects like market frequency and psychology will help you have more and more trades (increased volume of trading) within a single day, sometimes over several markets, which means you can have a higher potential of making more profits. Don’t fall prey to the hype surrounding day trading and how you can make a ridiculous amount of money from it, to the point that you carelessly pump in a huge amount of investment capital into speculative commodities like futures or Forex.
While huge profits are possible in day trading, treat it like poker and start small. Remember, with day trading, you do not want your profits to run and that doesn’t mean that you should let your losses run either. Always trade with certainty, and with a smaller profit margin, you should always have good discipline and stick to tried and true strategies (while being flexible enough to change at the flip of a coin) and you should always have ‘risk capital’ on the side for a market bailout (to cover your losses); racking up bad credit in the market will only serve to get you barred from trading.
At the end of the day, it is about money management and it is slightly harder because this is when the market is more dynamic and the long term is not in the question. Once you have the discipline to run the market in the day trade, only then will you be successful.
Day Trading COH for $908 in 30 min. — Meir Barak