Day Trading As A Living?

Day Trading As A Living? 

The words "day trading" tend be brought up in casual conversations these days as most people know someone who has tried it or know someone who knows someone that has. With the ease of accessing online brokers, day trading has begun to take off in recent years as both a hobby and a full time job. With that in mind, there are several considerations you need to keep in mind before you decide to begin day trading on any level.

First, you need to make sure that you understand the risks involved in day trading, especially on the Forex market. Day trading is not gambling. Day trading is not a get rich quick scheme. Day trading is hard work that requires the ability and time to learn a great deal of information and apply it in real time across a spectrum of continuously changing assets. The biggest tip you need to remember is to always have patience. Do not make a trade simply because you want to make money. Make the trade because its right.

Day trading is not for everyone. It requires the ability to handle the ups and downs of making successful and unsuccessful trades. The Forex market trades twenty-four hours a day throughout the workweek. That does not mean that you need to, or should, trade anywhere close to that many hours. Maybe you only have a few hours after your normal job to trade, that is absolutely fine. You just need to realize that no matter when you can trade, you should only trade when market conditions are right for your trading strategy. This brings up another key point, always trade using some sort of strategy. You can trade off of technical analysis based on the chart of the asset you are trading or you can look to fundamental analysis such as how recent announcements from the Federal Reserve will impact the value of the US Dollar. Or you may wish to invoke a combination strategy. Either way, develop (or learn) a strategy and stick to it. Every time you make a trade, do so for a reason, not just on a whim.

Consistency in day trading is the hardest thing to accomplish. Any trader can get lucky or un-lucky. Those that survive and make a full career out of day trading make serious amounts of money each day and do so because they consistently trade correctly. Correctly does not mean that they always win. Correctly means that they know when to cut their losses when a trade is going bad and when to lock in profits and not expect more than is necessary when things go well. Set a goal for each trade and stick to it. Do not expect to make an outrageous percentage gain on any one trade. Be realistic. Set goals. Stick to them.

Also realize that no successful trader became successful over night. It is only through hard work and dedication to learning about what influences the markets, different trading strategies, and the best times to trade that a trader becomes successful. Research as much as you can about the Forex market. Read as many different books as you can. Stay away from robot trading programs - they simply do not work. Learn how to trade and why to make a trade. And most of all, have fun.

All trading can be a risk!

Day Trading

Day Trading

Day Trading, currency or stock buying and selling, also known as forex. A gain on forex is called “profit on exchange” whereas a loss on forex is called “loss on exchange”. Forex Day trading involves opening and closing positions on the foreign exchange within 24 hours. This principally means that a day trader will buy and sell foreign currency within the day trade. Forex is affected by things such as level of production in the economy, geopolitical circumstances, inflationary pressures such as crude oil prices, and Acts of God such as earthquakes. For you to be able to trade on currencies, you need to have done dummy trading for not less than six months as this is a high risk business. 

 

To become a successful trader, you need to learn continuously. At times you will burn your fingers and lose your deposit. But never give up. This is the reason why the first trading account should be a dummy one, then a mini forex account of around 500 dollars. If the mini account is profitable over time, then you are ready for the big league. Expert traders incorporate an automated trading system known as online forex broker that helps the traders to open and close positions from the comfort of their home. The online trading of currencies has several benefits over pit’ trading. Some of these benefits are highlighted below.

 

24 Hour Real Time Market Analysis Data

The most obvious benefit of being an online trader is the 24 hour trading. No human being can be able to monitor the foreign currency exchange market data 24 hours a day. If you have access to the exchange data through an automated online broker, you will not only be able to trade in any time zone, but you will also have the live market analysis data on your laptop or tablet. Online trading is especially important for traveling business men.

 

No Commissions

Online traders are able to avoid the punitive commissions charged by the physical brokers in the exchanges. Remember that the forex day trading market is highly liquid, competitive and risky. These commissions may be the difference between a profit and a break even, or even loss. !

 

Split Second Order Execution

The moment you fill up an order and hits the execute button, the order is immediately executed. Now, supposing you are a large trader or broker who executes hundreds of trades. The smart way to go about this will be to do it online since you will accomplish more orders, hence better profitability. You are also less likely to make mistakes as most online brokers such as easy-forex will warn you the moment you make a mistake on an order.

 

Opportunity Cost

The time spent traveling, shouting yourself hoarse, as well as the additional money you spend as commissions can get a better utility. Smart businessmen will always work smart; maximize the utilization of their resources and time to reap maximum profits. Are you a mediocre trader or you the new, tech savvy investor? 

Forex Day Trading

Forex Day Trading

Day trading involves buying and selling of securities on a single day
with the intention of making profit between the buying price and selling price of the securities. Day trading specifically entails trading of securities within the same trading day. Day trading differs from other forms of trading in that the positions held within a day are not held past that given trading day.

Day trading usually involves two types of trading styles, short term trading style also known as scalping and long term trading also known as momentum trading. Short term day trading is a style that involves buying and selling of large volumes of securities within seconds or minutes, with the aim of making a small percentage profit in each of the securities traded and at the same time cutting the chances of a loss to a minimum. Momentum trading on the other hand entails observing the patterns of the trading market and buying securities at low prices with the aim of selling them at higher prices at a later time of the same day. Some traders may use both trading styles while others opt for a single style and stick to it.

A day trader can decide to trade directly by using various forms of Forex exchange of which requires them to have a trading account with each of them thus it's much easier for one to use an online Forex trading broker. As a day trader you should have adequate information and knowledge about Forex trading to ensure you don't lose large sums of money. A Forex day trader should have sufficient capital before going into Forex trading, by that i mean, you should have risk capital, that is, capital you are willing to lose without you going into a financial crisis. Forex day trading involves huge risks which can lead to profits or loses. A Forex day trader should also have a specific trading strategy, as a day trader, you should learn both trading styles and pick one which suits you best if not both.

An example of how Forex day trading works can consist of transactions involving currency pairs whereby a currency pair like a US dollar and a Euro, usually standardized in a EUR/USD format, can change their exchange rates at certain times of the day. An exchange rate of EUR/USD = 1.401, meaning every Euro will cost $1.4 at 9.00pm, can change in the exchange rate to EUR/USD = 1.411 at 11.00pm, thus meaning if the day trader had bought the currency at the former price and happens to sell at the latter price, they stand a chance to make a certain percentage of profit according to the amount of currencies purchased at the time. The Forex exchange of the Euro against the Dollar is usually of very small amounts, say, of 1/100 of a cent. Other currency pairs have different exchange rates.

As a starting Forex day trader i would advice you to gather more information on how Forex day trading works from websites like 'Babypips' which will give you a hand to hand guide on how to go about Forex day trading. Another Information website you need to visit before starting your Forex day trading from home should be 'Investopedia' , Investopedia will inform you on what you need to know before starting day trading at Forex trade and also strategies on which to use to avoid incurring huge loses in your trading business. Investopedia, also offers a free Forex simulator to help you fully grasp how Forex day trading works.