Learn Day Trading
Day trading or same daytrading is a unique and popular concept among stock players who trade with the aim of making quick profits.
Day trading is an attractive option for all stock traders for having the potential of incurring huge profits if traded wisely and calculatingly.
There can be two types of day trading.
The first is the delivery-based day trading where the trader takes delivery of the shares and hold on to them till he gets favorable rates to dispose them off at a profit.
The second type is the same day buying and selling without even taking delivery of shares.
On an average, it has been noticed that market are about 2-3% volatile on a daily basis.
The day traders take advantage of this market movement to extract profit out of their chosen shares.
It has several advantages.
Trading can be done even with a small amount.
There is no need of huge investments.
So it suits every pocket.
Moreover, you get return on your investment daily and do not have to wait for profits.
So you can constantly roll your capital without blocking it.
It is however a risky business.
The profits extracted out of day trading are not huge as the market move on a limited scale on a daily basis.
In order to reap high percentage returns, one usually has to hold on to the shares and wait for sometime with a long-term horizon, which is not possible for day traders.
It is also easy to lose money in day trading and the strategy is not as easy as it seems.
The biggest hurdle that a day trader faces is that he does not know when to enter and exit the market.
The stock prices need constant monitoring and day traders need to sit hooked up to the computer screens for hours.
Investors also make the mistake of not using the stop-loss order strategies to minimize their chances of losses.
Thereby they fail to protect their money from these daily short-term market movements.
These traders also make the mistake of holding on to their stocks overnight with the aim of finding an opportune time the next day when the markets open once again, to sell them off and make up for the losses.
But this way they do not comply with the basic principle of day trading.
The concept of day trading came into vogue because traders were interested in selling off their shares the same day.
This practice is generally encouraged as it protects the stocks from the market movements triggered by happenings beyond the official trading hours when the market remains closed.
There are several types of day trading styles.
These styles are implemented by the different traders to suit their specific personalities as well as their specific needs.
Day trading might be short term trading in which traders hold their position only for a brief time period that ranges from a few seconds to minutes.
This practice is also known as scalping.
Day trading might also be in the form of swing or position trading in which the positions are held for the entire trading day.
Thus day trading can be very flexible and offer a wide range of options.
Most day traders would simply stick to a particular style but sometimes they might just go in for a mix of styles mostly depending on the market and general economic scenario prevailing at a particular point in time.
Day trading also has different trends of trades: Trend trades, counter-trade trends and ranging trades.
Trend trade happens in the direction of the price movement, for example, buying of shares when the prices are moving up and counter trend trades happen against the direction of the price movement, that is, selling of shares or stocks when the prices move up.
Ranging trade move back and forth between two prices and is usually practiced when the market is moving sideways.
Traders adopt different trends depending on the market situation.
Even though the primary goal of every day trader is to make profit out of a single day and look for opportune moments for trading, they might differ in their strategies.
Some traders might try and take advantage of each and every market fluctuation and trade several times a day.
On the other hand, there might be traders who would wait throughout the day trying to gauge the best market situation to conduct a trade and might end up with just a single trade in one complete day.
Day trading is an attractive option for all stock traders for having the potential of incurring huge profits if traded wisely and calculatingly.
There can be two types of day trading.
The first is the delivery-based day trading where the trader takes delivery of the shares and hold on to them till he gets favorable rates to dispose them off at a profit.
The second type is the same day buying and selling without even taking delivery of shares.
On an average, it has been noticed that market are about 2-3% volatile on a daily basis.
The day traders take advantage of this market movement to extract profit out of their chosen shares.
It has several advantages.
Trading can be done even with a small amount.
There is no need of huge investments.
So it suits every pocket.
Moreover, you get return on your investment daily and do not have to wait for profits.
So you can constantly roll your capital without blocking it.
It is however a risky business.
The profits extracted out of day trading are not huge as the market move on a limited scale on a daily basis.
In order to reap high percentage returns, one usually has to hold on to the shares and wait for sometime with a long-term horizon, which is not possible for day traders.
It is also easy to lose money in day trading and the strategy is not as easy as it seems.
The biggest hurdle that a day trader faces is that he does not know when to enter and exit the market.
The stock prices need constant monitoring and day traders need to sit hooked up to the computer screens for hours.
Investors also make the mistake of not using the stop-loss order strategies to minimize their chances of losses.
Thereby they fail to protect their money from these daily short-term market movements.
These traders also make the mistake of holding on to their stocks overnight with the aim of finding an opportune time the next day when the markets open once again, to sell them off and make up for the losses.
But this way they do not comply with the basic principle of day trading.
The concept of day trading came into vogue because traders were interested in selling off their shares the same day.
This practice is generally encouraged as it protects the stocks from the market movements triggered by happenings beyond the official trading hours when the market remains closed.
There are several types of day trading styles.
These styles are implemented by the different traders to suit their specific personalities as well as their specific needs.
Day trading might be short term trading in which traders hold their position only for a brief time period that ranges from a few seconds to minutes.
This practice is also known as scalping.
Day trading might also be in the form of swing or position trading in which the positions are held for the entire trading day.
Thus day trading can be very flexible and offer a wide range of options.
Most day traders would simply stick to a particular style but sometimes they might just go in for a mix of styles mostly depending on the market and general economic scenario prevailing at a particular point in time.
Day trading also has different trends of trades: Trend trades, counter-trade trends and ranging trades.
Trend trade happens in the direction of the price movement, for example, buying of shares when the prices are moving up and counter trend trades happen against the direction of the price movement, that is, selling of shares or stocks when the prices move up.
Ranging trade move back and forth between two prices and is usually practiced when the market is moving sideways.
Traders adopt different trends depending on the market situation.
Even though the primary goal of every day trader is to make profit out of a single day and look for opportune moments for trading, they might differ in their strategies.
Some traders might try and take advantage of each and every market fluctuation and trade several times a day.
On the other hand, there might be traders who would wait throughout the day trying to gauge the best market situation to conduct a trade and might end up with just a single trade in one complete day.
