Getting Started With Day Trading
http://bit.ly/wpEUDo
When all the positions a trader takes are closed during the same day before the market closes, that's called day trading. There are a large number of people who dabble in day trades from home. But it needs a lot more expertise than ordinary trading, not to mention a rage of tools and market data. That said, most of the tools are made available by brokers, and trading software can make things even easier. Because of the limited timeframe, the volumes of day trades have to be significantly larger than ordinary trading, in order to make sizable profits. This is one area where new traders should be careful. With margin trading, a trader can use leverage to enter into trades worth big amounts without enough assets to cover the losses (if any). The point here is that there has to be a fallback mechanism. This is why traders need to have a clear and pre-planned trading strategy, use only a portion of the funds in the trading account, and not get carried away by emotion. There are systems in place where day trading can be done precisely and impersonally, where orders get placed when the market hits a specific level, and the software can help execute trades. These order types are of many types, but very few traders will ever require more than 3 or 4 of the most popular types. The easiest one is the Market Order. Under this type, the order is placed at the current price even if the market has moved past the price the trader wants. A Limit Order is where the order is placed only at a specific better price, or not at all. A Stop Order works the same as a Market Order, but only after a specific price has been reached. Stop Limit Orders are placed at and after a specific price. New traders who want to start trading should start by getting a computer with broadband internet. Choose a broker depending on the fees and commissions the broker charges, and on the kind of tools the broker offers to internet day traders. Some traders focus specific markets, so that should be taken into consideration too. Lastly, there are strategies (swing trades, arbitrage, trading news, etc) to be learned and certain paid tools and assets that can be very helpful. To be noted that it is important to get some first-hand exposure before spending money. Even so, once the momentum picks up, some of these day trading tools are near essential, such as access to live market data and trading software.