Investing Articles | Day Trading

PERSONAL FINANCE AND INVESTING

AN INTRODUCTION TO DAY TRADING

The stock market is a very exciting place and if you understand it, it is a great way to make a living. Many people day trade as their full time occupation. Day trading is a very exciting way to follow the stock and money markets.

Day trading is basically making trades or taking positions in a variety of financial instruments including stocks and shares, financial futures, options, commodities, foreign exchange. Basically, anything that is dynamically traded on an electronic exchange. The beauty is, you don’t even need to know much about the markets or instruments that you are trading in. Having too much knowledge or information might even be detrimental to your trading.

To be able to day trade, you need a computer terminal, fast broadband connection, an online broking account, some subscriptions to real time price feeds and most importantly, you need to spend some time learning technical analysis and understand the workings of the markets that you are planning to trade in. There are many seminars and courses that you can take to learn the “secrets of the day traders”! These are mainly about the sexy world of day trading and it must be said that they don't really teach you about the fundamentals of investing, which is longer term and is a totally different discipline.

What most of these stock market courses teach you is the basics of how the markets work, the market jargon and the main tool that will assist you is technical analysis. You will learn about Fibonacci charts, Japanese Candlestick Charts, Stochastic, Moving Average Convergence- Divergence (MACD), Relative Strength Index and Bollinger Bands. These are all different indicators which can signal when the markets will move up or down as day trading is based on the assumption that all markets are predictable based on human emotions. Hence you will see patterns recurring in markets and by studying these charts, you can predict market movements and take the positions to back up these predictions.

If you want to learn more about successful day trading strategies, here is a resource I can recommend, the Surefire Forex Trading System. This programme has been highly rated as a great educational tool for day traders and launched many trading careers. It teaches you how to trade in forex (but these same techniques can be used for a lot of other financial instruments), how to use some advanced tools, how to analyse Fibonacci trends and a whole lot more. It is a trading system, trading methods and explains all the signals that you need to know to read the markets. Learn more about the Surefire Forex Trading System.

If you are a more Advanced Day Trader you might like to learn more advanced trading techniques. Have a look at the Trader's Secret Code.

As with investing, in order to succeed, you have to not be emotionally attached to the positions you take. You have to set very stringent stop loss limits and take profits when your targets have been reached. If you follow some disciplined rules for trading, you are more likely to take less risks and suffer less losses. The best step to take before you embark on a day trading career is to do lots of research on the web and do some paper trading before you start to invest your own hard earned money. Happy Trading!

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articles > AN INTRODUCTION TO DAY TRADING

PERSONAL FINANCE AND INVESTING

AN INTRODUCTION TO DAY TRADING

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