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[S1006]Stock Day Trading Course

by Justin Demerchant, Jus

The person who is deeply involved in stock market investing knows what day trading is. To the outsiders, this kind of trading is that practice of buying and selling the financial instruments within one day. The transactions are then all closed at the close of the trading day. This shouldn't be confused with the after-hours trading.

In this kind of trading the most commonly traded instruments are the stocks, the stock options, currencies and other futures contracts.

This kind of trading can be differentiated from other mode of trading in terms of the trade frequency and the risks and profits involved. There are a number of trading styles that constitute day trading but all these sub-trading strategies are known in the market as day trading. In this kind of trading the day trader is always on the lookout for possible trading set-ups. And depending on the trading game or system, the number of trades that can be performed by the day trader will go anywhere from zero to a dozen trades.

Day trading is known for the many short trades within the day. Some trades may lasts for a few seconds and may lasts as well for a few minutes. The traders can buy and sell many times in day and may also receive trading fee discounts from firms and these are also known as the trading bonus. Day traders are known to focus much o price momentum and on price patterns.

For those who are involved in this kind of trading, it is imperative that all trades should be finished within the trading day in order to avoid the unmanageable risks or the negative price gaps. These are known as the price movements that can happen overnight. Traders who perform this kind of trading scheme follow some rough rules and guidelines. They believe that profits should run its course and it is acceptable to stay with a certain position after the market day closes. Day traders usually borrow money in order to make the trades in the day. This kind of trade is known as margin trading.

Day trading is known for its very high profits or very high losses. This kind of trading offers a high risk for investors because of the nature of financial leverage and the effects of rapid returns. So it will not come as a surprise when a day trader can earn his millions by doing day trading for the year. Day traders are known for their reputation as "gambler" and "bandits". This label was used to refer to the fact that these trades can make high profits at a certain trading day.

Simply put, this trading is a risky one and even more risky if the trader trades in the loser's system rather than the one that is winnable. This trade practice is also risky if the trader has poor discipline, has inadequate capital in hand and when the trader executes trades poorly. Usually day traders make use of many techniques in order to make profits. These techniques include trend following, contrarian investing, range trading, scalping, rebate trading and news playing.

Have you heard of day traders? These are people who reap profits from Wall Street day in day out. They do nothing but trade, they answer to no one but themselves. Day trading is their livelihood, their bread and butter. Day trading is profit driven. If you have aims other than making money from the markets, you have probably come to the wrong site. This is not a site for gamblers who seek short term thrills in the markets, nor is it meant to be a theorectical exposition on day trading for academic researchers.

Why day trade? Is it worth the effort? Day trading offers the road to financial freedom. The day trader is independent. He is free from the office routine, not restraint by time or place, he works when and where he fancies. This is the power of day trading!

What does it takes? You don't need to be extremely smart to be successful in day trading. The most successful day traders are those who have the iron-resolve and solid discipline. Intelligence is certainly welcomed, but is not an essential criterion for success. I was never the top in my class and always scrapped through my exams. SO WHAT? I am making big bucks by just trading a few hours per day.

Don't get me wrong, I am not profitable from day one. This site does not offer another get rich fast campaign. It took me almost one year of daily trading to reach where I am now. Constantly revising and researching on various methods finally paid off. It is hard work and you are not going to get any richer just by just reading and not practicing. Can you drive a car just by reading the manual? You have to practice what you learn. I hope you can learn something from this site to jumpstart your trading.

Day Trading VS Investing

There is a distinct difference between day trading and investing. The main difference is the time frame and methodology used. Investing requires a much longer time frame than trading, from months to years to decades. Usually you want to select a good company that will not go bankrupt the next day you purchase it. You will also want to analyze the fundamentals of the companies, make sure it is in good financial health and has a competitive advantage relative to other companies in the industry.

Trading takes a different approach to making money. The time frame considered is short from a few minutes to hours to days, weeks or maybe a month. Specifically, day trading refers to strictly trading within the day. This means that you do not hold positions overnight. For example, if you buy at 10:00 (EST), you have to sell before 16:15(EST) when the market closes.

There are no rules against holding overnight but risk is minimized if trading is strictly restricted to within the day. The market often moves in reaction to news when exchanges are closed. Stocks usually do not have much liquidity and trade on light volume after market hours. Imagine what would happen to your long position when there is a sudden hurricane strike when market is closed. The market will drop but you might not be able to sell at a reasonable price due to low volume. I sleep better at night when I know have no open positions overnight. Whatever losses and winnings are strictly during market hours when there is enough volume to trade. How the market moves after the closing bell does not affect me and I start the next day with a new state of mind.

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About Author

Both Justin Demerchant & Michael Taylor are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Justin Demerchant has sinced written about articles on various topics from Video Games, Video Games and Health. Justin DeMerchant is the founder of ,. Justin Demerchant's top article generates over 27100 views. to your Favourites.

Michael Taylor has sinced written about articles on various topics from Day Trading, Stock and Day Trading. . Michael Taylor's top article generates over 8100 views. to your Favourites.