Why I'm A Day Trader Since 1987?
Day trading is the buying and selling of various financial instruments, like futures, options, foreign currencies and stocks, with the goal of making a profit from the difference between the buying and the selling price. also has different types of trade, such as trend trades, counter-trend trades, and ranging trades.
In this article, we will discuss what the popular markets for are. You will also learn why is not really an extremely risky investment.
Some of the most popular markets for include the following:
1. Futures based on currencies
2. Futures based on stock indexes
3. Futures based on commodities (oil, gold, wheat)
4. Options on futures
5. Currencies (Euro to US Dollar, Euro to British Pound)
Let us examine why short term and long-term investment pose the same risk in terms of capital loss. We will consider a hypothetical scenario to explain the point.
Let's assume you are a value investor and invested in a company A. On 25th July'07, company A is opened at $29 in the morning, and then plummets to $25 within a few hours due to a large class action lawsuit being filed against them. If the company A goes to bankrupt because of said lawsuit, share of company A will fall drastically. In this situation, all kinds of share market investors will loose their capital because the stock is worthless now.
Stock pick based company performance is very crucial for value investors but in case of technical analysis and related
signal is most important. Most traders follow Fibonacci series to predict stock movement.
Even in the above case, day trader might protect their capital well because they are normally very cautious and open to all kinds of market news and signals. Day traders mainly work based on market intelligence and their own daytrading rules.
If you want to be a good day trader, you need to be disciplined, quick to learn from various situations, ready to take advice from your coach. Having correct and timely information is extremely important to take any financial decision.
Most day traders close their positions within the day i.e. they either sell or cover their short position. This is the major benefits of short term day trader is that the loss taken during one day is only for THAT day and it is not magnified over the next trading day. adds velocity to the money and smart investors always prefer to roll money in market so that they can pump in the money to a suitable opportunity.
Your own strategy is the biggest secret of all successful day traders. This is true whether you are investing in equity or currency market.
Author is an active stock market trader. Here you will find excellent information on online stock trading
using penny stock picking software
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