somrat4030
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Forex Forum A place where day traders can get important day trading tips and tactics.
Day trading is the act of buying and selling stocks within a very short window of time—we're talking minutes or hours—with the goal of making a bunch of very small profits that will hopefully add up to big gains over time. A day trader might buy a stock at 9:15 a.m., turn around and sell it at 2:37 p.m. that same day, and then do it all over again with another stock.
What is a Day Trader?
Every day trader can be a trader who executes a big quantity of short and extended trades to benefit from intraday market cost action. The price action is due to temporary supply and demand inefficiencies caused due to purchases and purchases in the asset.
There's no special qualification needed to become a day trader. Rather a day traders are sorted in line with the frequency of the trading. FINRA and New york stock exchange classify day traders according to whether she or he trades four or even more occasions throughout a five-day span, provided the amount of day trades is much more than 6% from the customer's total trading activity in that period or even the brokerage/investment firm where she or he has opened up a free account views him each day trader. Day traders are susceptible to capital and margin maintenance needs.
How Does Day Trading Work?
Day traders are not really what you would call "long-term" thinkers. Every day, they're glued to their computer screens and televisions in order to stay up to date on the news and any trends that might give them hints about which direction a company's stock will move that day.
Can You Make Money Day Trading?
One of the questions we hear a lot is, "can I make money day trading?" The answer is, of course, you can! That answer may surprise you coming from a group that preaches holistic financial planning. Many advisors are quick to shame the practice of day trading without acknowledging that someday traders, in fact, DO make money. The truth is, some investors (albeit very few) have even been able to make a living doing it.
What Is The Benefits Of Day Trading?
1. More Reliable Trade Setups
If there's one thing that you need in order to make consistent profits from the markets, is a definable edge. A definable edge requires a certain probability for success that can be predicted fairly reliably. So whether you are a chart pattern trader, an indicator-based trader, support and resistance trader, or any other type of trader, you will undoubtedly find that the daily timeframe offers some of the cleanest price action signals on the chart.
2. No Overnight Risks
One of the best advantages of day trading is ability to close your position at or before the end of the trading day. For a day trader who opens and closes his position before the trading day ends, the risks of holding a stock overnight are erased. A traditional trader's profits can disappear overnight with traditional, long-term trading, but with day trading your profits are secure as long as you close your positions before the end of the trading day. This allows you – if it was a good day – to sleep soundly at night.
3. You're in control of your destiny.
Undoubtedly, one of the greatest advantages of day trading is that you are in control of creating your own success.
Will you make millions in the market? That's up to you to decide as all of my millionaire trading challenge students have worked their butts off studying, their success is NOT due to luck. If you really want to become a millionaire, it is possible. It's not easy, though.
4. Focus on Technical Analysis
There are two types of analysis that most traders and investors look to for financial information: technical analysis and fundamental analysis. Traditional, long-term traders have the opportunity to focus on a company's fundamentals – company health, financial statements, and management information – to see how its stock value will change in the long run. Although this is important information to know, day traders can focus on technical analysis throughout the day to make successful, and quick, transactions, resulting in profits.
5. There is a clear path toward success.
You've probably already gathered this fact from the other advantages of day trading already listed. But to make it crystal clear: one of the best things about day trading is that there is a clear-cut path toward success. More than ever, in this day and age, success is yours for the taking. It's less a matter of whether or not it's possible, and more of a matter of whether or not you're willing to take advantage.
Risks of day trading
Many day traders trade on margin that is provided to them by their brokerage firm. Margin is essentially a loan to the investor, and it is the decision of the broker whether to provide margin to any individual investor. Brokers are mandated by law to require day traders have $25,000 in their accounts at all times. If the investor's account falls below $25,000, the investor has five business days to replenish the account. If the investor fails to replenish the account, he or she will be forced to trade on a cash available basis for the next 90 days and maybe restricted from day trading.
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