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Day trading in stock markets has lots and lots of risks- use this post for information purpose only and please refer to our disclaimer at bottom of this page.
One of the best ways to make money is by trading in the stock market. You can earn a lot of money by buying and selling stocks.
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One way to earn a lot of money is through day trading. Day trading refers to buying and selling financial instruments. Transactions in day trading are usually fast and end in a single trading day. In day trading, you can make a lot of money in a single day.
However, you should know that day trading is business. And, in all kinds of business, you should expect some losses. In day trading, losses can be huge, especially if you don’t know how to day trade.
Also read -
-BSE aims at internationalization of listing business
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list
Although day trading can offer you huge income, it can also give you severe financial losses. It is know that beginner day traders lose money on the first months of trading and most of them never really get the hang of it and losses interest even if they never really recovered their losses.
People have been arguing that day trading is a very risky business and should stay away from it while others say that day trading is one of the best ways to make a viable profit.
However, no matter what people say, day trading is there to stay in the market place. It can never be denied that day trading is one of the most important aspects in the market place. It keeps the market efficient and liquid.
However, there are successful day traders who earns a lot of money by just day trading. These people have been known to earn more than a million dollars a year.
So, if you plan on doing day trading, you should be prepared on losing money on the first few months of day trading.
Also read -
-BSE aims at internationalization of listing business
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list
Here are some characteristics of a successful day trader that you should try to copy.
The first thing you should consider is that you should have enough capital to trade. Also, you should only risk money that you can afford to lose. This way, it won’t be too frustrating in case you had a bad day in the market.
The next thing you should consider is that you should never enter this kind of business if you don’t know anything about the market. You should be knowledgeable about the market in order to be successful in day trading.
Also read -
-BSE aims at internationalization of listing business
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list
As you might have heard, you need discipline. Many day traders end up losing a lot of money because they don’t have the patience and the discipline to day trade. You should know how to plan trades and use it as your strategy.
To get better at anything you do, you need to practice. Experienced day traders practice a lot and formulate different kinds of strategy in order to minimize loss and maximize profit. There are different kinds of simulated day trading software available. Use it.
These are some of the things you should know about day trading. In time, if you follow these guidelines, you can be sure of success as a day trader.
There are six basic strategies day traders use to make a profit. These six strategies are:
• Trend following
• Playing news events
• Scalping
Also read -
-BSE aims at internationalization of listing business
-Effect of Recession on Indian Economy
-Economies hit by recession
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• Range trading
• Covering spreads
• Technical trading
In trend following, a day trader who uses this strategy buys stocks that are rising or, short-sells it if it is falling. They always expect that the trend of the stock (rising or falling) will continue.
In range trading, a day trader who uses this strategy buys stocks at a low price and sells it at the high. They assume that once a stock hits a high, it will eventually fall back to low and continue in that direction for some time.
Playing the news strategy is the basic and most common strategy that most day traders do. They will buy a stock that has announced good news and will sell a stock if it announced bad news.
Also read -
-BSE aims at internationalization of listing business
-Effect of Recession on Indian Economy
-Economies hit by recession
-World's Strongest economies list
Scalping is a strategy where day traders establishes and liquidates a position very quickly. This strategy usually takes place within minutes or even seconds.
Shorting stocks strategy is when day traders assume that the stock they purchased will rise. Another shorting stocks strategy is that they tend to borrow stocks from brokers and sells it hoping that the price will go down and buy it again.
Day trading is not an easy thing to do. You need to have the following qualities in order to be successful in this kind of business.
Firstly, you have to consider that day trading is mentally and psychologically challenging. You should always be focused on the trades. You should also know how to decide what to do quickly when you see a trend in a particular stock.
Secondly, you have to know how to manage your money. Many people who have failed in day trading didn’t manage their money well enough. They tend to spend a lot of money more than they can afford in order to make a huge profit.
Always remember that day trading is not easy on the first months. This is why you should expect losing when you are just starting to day trade. Also, you will need enough capital in order for you to be successful in day trading.
