Day Trading Talk

Daniel Millions asked:


Some of the riskiest investing that can be done in the stock market exists within what is called day trading. This practice is deemed risky and the results have proven themselves time after time. Vat fortunes can be lost within mere seconds if one is not careful with day trading so why do so many people engage in this activity?

The Risks of Day Trading: Day trading works based on the assumption that if a stock increases by a small margin, it will continue to do so within the next few seconds or even minutes. This had led to the day trading method. In this method, investors seek out stocks to trade- not keeping them more than a few seconds or minutes.

The prime stock a day trader targets is one that has been increasing within the recent past. The investor will then funnel a massive amount of money into the stock and hope the trend continues. If it does, the investor sells it immediately. If it doesn’t, the investor may choose to cut his or her losses by selling low- or hope for the best.

Since this method requires a high investment and extremely risky circumstances, this method has been problematic for investors.

Why So Many Engage in Day Trading: So what is worth the risk? Of course, the payout must have to be quite large! Typical day traders can make a very wealthy sum of money within a few hours of this technique. There are, however, some certain guidelines that these day traders should follow.

First, a day trader should only invest what he or she can afford to lose. This is because day trading is extremely risky and losing all the money in your savings account would turn your life upside down. Because of this reason, day trading is usually restricted to the wealthy (exceptions are present, however).

Day traders suffer large commission fees. Since most trading companies charge based on the amount of shares an investor buys and sells, the day trading investor gets hit hard with commissions. A day trader will be selling possibly thousands of shares every hour. Multiply these thousands of shares by the stock broker, and you can see why day trading is usually restricted to the wealthy.

Programs to Help Day Traders: There are some programs that allow day traders to benefit from advice, however. Seminars, educational classes, and online courses can help educate investors on the safest route in day trading.

Generally there is a lot of hype related to day trading, but there are a few gems on the internet to look out for. The right day trading program, coupled with a little investment and luck, can mean all the difference in wealth.

If you are a beginning investor, it is typically a very bad idea to jump right into day trading. Instead, one should either take advantage of the educational resources mentioned above, or at least get experience with the stock market firsthand.

Final Thoughts on Day Trading: Whatever you take away from this message, remember that day trading will indeed require a hefty investment. Be prepared to meet some losses along the way- day trading has lost (and made) many fortunes. If all else fails, call onto the help of experts in day trading- for a fee they are usually more than happy to let their secrets loose.



ARCHER

Justin Owen asked:


Day trading has emerged as a popular trend practiced all over, due to the fact that it can minimize forex trading losses to a significant level, if managed properly. It thus helps to exercise control over your transactions and ensures that you do not face any shock. In day trading, the stocks are bought and sold on the same day and thus there are not much of fluctuations and thus nothing to feel scared about.

Day Trading reduces the risk of overnight fluctuations in the value of stocks and is associated with the benefit of risk control. I was always fascinated by forex trading but did not want to take risk, so I started with day trading and it fetched me real good returns and I did not even lose any money, because before there could have been fluctuations in the price, I used to sell off my stocks. So, day trading truly worked for me. There are many day traders who have benefited a lot like me.

Day trading is perceived to be one of the safest as well as quickest means of making money. Taking into consideration the volatility of forex market, day trading appears to be the best choice. Day traders keep an eye on the market and grab the opportunity as and when they get a chance to buy fairly cheap stocks and sell them off at high prices, then there is the possibility of earning enormous profits. In day trading, if you invest a huge capital, then rise by even a small percent can make a lot of difference.

Let us understand this with the help of an example. Imagine you bought near about 5000 shares with each share costing $30. Now if the share rises marginally up to $30.10, then also you will earn a profit of $500, which is quite good in comparison to the percentage of rise. It hardly takes any time to sell off your original share costing $30 at $30.10 and if you keep repeating this whole process, you can earn considerable amount of profits. The risk was low but profits were significant.

This example must have made it clear to you as to why do most of the forex traders believe that day trading is the fastest way to earn money and that too without bearing any risk as such. But, despite all facts, it is recommended that day traders should never hold their stocks for a very long period of time, because then there are chances of losing money. So, don’t keep your stock with you for a longer period of time, sell it immediately.

Some of the experienced day traders are of the view that early morning is not the right time to day trade, as you may get inappropriate signals that can make you indulge in a wrong deal and suffer losses. It is recommended to wait for at least 2nd hour of trading and only then you should think of opening your position. This is owing to the fact that it is mainly during the second or third hour of forex trading session that you get to see the real situation taking place in forex market.

To conclude, day trading is indeed effective in earning profits but just be careful.



Den Burke

Markus Heitkoetter asked:


Day trading the stock market involves the rapid buying and selling of stocks on a day-to-day basis. This technique is used to secure quick profits from the constant changes in stock values, minute to minute, second to second. It is rare that a day trader will remain in a trade over the course of a night into the next day. These trades are entered and exited in a matter of minutes.

The main question that most people ask when it comes to day trading is simple: ‘is it necessary to sit at a computer watching the markets ALL day long in order to be a successful day trader?’

The answer is no. It’s not necessary to sit at a computer all day long. There are a number of factors to consider, but generally the rule of day trading is to trade when everyone else is trading. In other words, trade in the morning.

As with all financial investments, day trading is risky – in fact, it’s one of the riskiest forms of trading out there. The stock prices rise or fall according to the behaviour of the market, which is entirely unpredictable. Day traders buy and sell shares rapidly in the hopes of gaining profits within the minutes and seconds they own those particular stocks. Simple to do in theory, harder to do in practice.

If you are constrained by a small amount of capital, you may not be able to buy large amounts of a stock, but buying only a small amount can add to the risk of a loss. And, obviously, it is impossible to predict with certainty which stocks will result in profits and which in losses. Even the best of traders must learn to accept both outcomes.

It’s also important to know that in day trading, it is the number of shares rather than the value of shares that should be the focus. If you day trade, you WILL face losses, but even for the more expensive stocks, the loss should be marginal, because prices do not usually fluctuate to an extreme degree over the course of just one day.

The day trading industry deals in a large variety of stocks and shares. Here are just a few:

Growth-Buying Shares – shares made from profit, which continue to grow in value. Eventually, these shares will begin to decline in price, and an experienced trader can usually predict the future of this type of share.

Small Caps – shares of companies which are on the rise and show no signs of stopping. Although these shares are generally cheap, they are a very risky investment for day traders. You’d be safer to go with large caps and/or mid-caps, which are much more secure and stable thanks to a premium.

Unloved Stocks – company stock that has not performed well in the past. Traders buy these shares in the hopes of generating profits if and when the stock rises in value. As with small caps, unloved stocks can be a risky choice for day traders.

These examples are NOT your only options when it comes to day trading stocks. The best way to determine which type of stock is right for you is to invest some time for careful research, a knowledge of market patterns, a solid strategy, and a disciplined trading plan.

The key to successful day trading is to be prepared. Know as much as possible about the industry before you begin actually trading. You need to learn to trade ONLY when the market gives the right signals, and ONLY when the volume of activity in the market supports a successful trading opportunity.



Arthur

Sue Jan asked:


This includes recognizing the stocks’ basic trend, the long and short setups, when to enter a trade, and where to place stops. Another very important basic is how to protect your profits and minimize losses.

Once you have learned the basics and are ready to try your first day trade, here are some tips and guidelines you should keep in mind that is essential to your success as a day trader.

Being a day trader requires a lot of time and practice before you get used to the everyday volatility in the market. Do not expect to become an expert day trader overnight. No matter how many books you have read or day traders you have watched, that will not make you an immediate expert.

There are day trading websites that simulate trading. Practice with their trading platform first before trying out the real thing. It could save you a lot of money and you will learn the ropes faster this way.

If you are ready for real live trading, do not be scared by the thought of losing money. There are ways to minimize your loss such as with stop orders.

If you lose money, do not worry, as some loss is to be expected. Just remember, with increased experience and sensitivity to the market, you will start turning a profit soon.

If you profit large sums of money, stop trading. Do not gamble it away by trying to gain even larger profits. You can always trade another day.

Sometimes the market will not perform as you expected. When you encounter this situation, it is best that you do not trade at all.

Once you gain more experience in day trading, you may be able to predict the direction of a stock price. However, try not to pick top stocks or bottom stocks. This is one of the most common mistakes of a beginner.

If you cannot predict where the market is heading, it is best if you stand aside and wait, or you can always go home and trade again another day.

It is a good idea to record all of your day trading results. This way you can learn what works and what does not, and be more effective in trading.

Observe good traders. Look at how and when they sell or buy. Generally, good day traders often buy on bad news and sell on good news.

Beginners often get emotional in their trades. Avoid this at all cost, stay emotionally detached and professional.

Learn to trust your instincts. Relying too much on analysis may mean letting a few good trades slip away from you.

As you gain experience, you will see that different day trading strategies are required on different days and required on different stocks. Be flexible.

Bad day traders often focus on too many stocks that are not manageable and often lose track on where each stock is heading. It is wise to limit your stocks in manageable numbers.

With patience and practice, you can be successful in day trading, and as your experience grows so do your profits. Everyday you can learn new day trading strategies in the market, which you can use to your advantage.



Gerald

Dan Alvarez asked:


A day trading robot? Gee Wiz! Sounds like science fiction, right? It did to me just a few years ago. I would have never imagined that such a thing was possible. First of all, I came from a school of thought that believed nothing could be programmed to trade the markets successfully. I strongly believed this and argued with anyone that crossed my path. “No automated day trading system could tackle the stock market; impossible!” or so I thought. I also said to myself, “How could a computer program successfully factor fear and greed [the emotions that move the market] into an equation designed to extract consistent short-term profits from the market each and every day?” Well…,

…the bad news is that there really isn’t a robot to day trade stocks. Sorry to burst your bubble.

But…the good news is that there is one that day trades currencies (you know, the great forex market that I love and have bored you over and over with throughout this website?).

No folks; this is not “Forex Made Easy.” This is “Forex Made Easier”- An automated day trading system that NOT ONLY comes with a highly sophisticated set of conditions to enter and exit the market, but one that also pulls the trigger (that is, executes the trades) for you, using proper money management without which day trading is doomed to failure. [If you have not read why I strongly believe that the forex (short for foreign exchange) market is the purest and best market to day trade in the world, go to the currency trading section of this website]. This automated system is also known as Forex Robot or FX Bot (for frequently asked questions about the trading robot, click here).

Yes day trading fans. This day trading robot (or bot) not only finds the trades, it takes advantage of them when it finds them.

When the forex trading robot was presented to me for the first time, it was difficult for me to accept the whole concept. I got to admit, I was pretty skeptical. If the explanation wouldn’t have come from the best two money managers and traders I know (and personal friends of mine), I wouldn’t have even listened. But after a while, I was sold. “You, Dan? Mr. Day Trading Tutor?” – “Telling us that you believe in a day trading robot after writing an endless amount of information about how people could learn how to day trade, how much you believe in day trading, how you have helped day traders in the past, etc., etc.?”

Whoa, whoa!!! People, don’t get so exited. All of these things are still true. There are people that will learn how to day trade successfully and become successful traders. I am still involved on a very limited basis on the training of some day traders. But there are also many people out there that will never succeed as day traders and others that, after having tried it, will realize that it is not for them.

This is the truth; plain and simple. And even if the day trading robot wouldn’t have existed, this would have still been reality. The FX robot is just something extra that I feel can help not just unsuccessful traders, but also investors who can add something different (a new component) to their investment portfolios; and believe me, this is completely different than any investment I have ever seen before.

I created Day Trading Tutor to give you the reality of trading. Well, talking about the trading Bot is an extension of this goal. Since it exists and can help you, I must tell you about it – period!

Ladies and gentlemen; I am sorry if I sound really exited about this trading Bot thing – so exited it made me that I even became part of it in order to be able to offer it to my clients, friends, and family members (read “How are you involved in the day trading Bot and are you doing it just for the money?” below. I like to be very clear about the things I say. It makes me sleep peacefully at night. The thing is that I haven’t been part of a great project like this for a long, long time. The money managers and traders that designed and monitor the day trading robot on a daily basis have become personal friends of mine in the last few years. They are great guys and exceptional traders. They have been top-ranked in the past in the forex money management industry. I don’t like recommending traders or money managers to people, but this is an exception.

The robot program rocks!



Sherry