Day trading is generally the buying and selling of a security within a single trading day. You can do this in any market, though it’s most common in the forex and stock market. In general, you have to be well-educated as well as well-funded to be a day trader. That’s why we think it’s not suitable for true beginners. Yikes!
Day traders generally serve two important functions:
The profit that a day trader can potentially make is still a huge topic of debate these days. That’s also to say that day trading is often misunderstood.
There are those who use day trading without enough knowledge. Pure guts with no brains generally lead to disaster. Meanwhile, others are successful in this department, in spite because of the risks.
A lot of pros like money managers and advisors steer clear of day trading. They believe that the reward isn’t really worth the risks.
On the flip side, those who do day trade argue that there is profit in day trading. Yet, they admit that the success rate is undeniably lower due to higher complexity and necessary risks.
Therefore, you can say that day trading is not for everyone, and you would be completely right.
If you still want to become a day trader, no one’s going to stop you. In fact, everyone will cheer for your great success. However, bear in mind that you need to be the following:
As we have said, jumping in the day trading wagon without enough knowledge and experience is a sure ticket to brokeville.
It’s wouldn’t be wise to assume you’ll make money in day trading, given the risks and complexities. That’s why day traders only use what we call ‘risk capital,’ which is basically money they can afford to lose.
This helps them protect themselves from being broke and makes it easier to remove emotions from trading. You usually have to have H-U-G-E capital to take advantage of intraday price movements.
If you really want to become a day trader, you have to ALWAYS be one step ahead of the whole market. You need to have intimate knowledge of various trading strategies and know how to use them depending on your trading situation.
The trading or dealing desk offers quick order executions, which are quite important, especially in times of volatility.
You will find that those who have this access are also those who work for larger institutions or manage huge amounts of funds.
The news is where most of your opportunities come from. And that’s why you must be the first one to know when a big event is about to happen.
This is a no-brainer. With all the things you need to do and ensure, having no discipline could be your ruin, no matter how good you think you are.
You feel that you can fit most of the listed above Characteristics of Day Trader, it means that the world of trade is waiting for you.
Interested in day trading while working? Check out the best broker for mobile traders of the year to try trading with.
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