There are a lot of people doing day trading for a living, and you can do this too. However, you must understand the difficulties, as well as know invaluable day trading strategies in order to be successful. You must also never forget that day trading for a living is a lot like running your own business, meaning that your workday is not over when the market bell rings. The time and effort you put in are of utmost importance.
Even more crucial than time and effort, though, is money. One of the biggest mistakes of trying to do day trading for a living is undercapitalization. Simply, if you don’t have disposable income, then you shouldn’t be day trading. Undercapitalization is the reason many start-up businesses fail, and it is the reason that day trading for a living fails too. The worst thing you can do is use a second mortgage or credit card advances, because you might as well throw your money straight in the garbage can.
There are other reasons that day trading for a living is not easy. First, you need to thoroughly study and examine the market you’ll be dealing with, including the sectors involved, as well as individual stocks. You must understand a variety of day trading strategies and the market you’re dealing with as a whole in order to be successful and accurate with trades.
Day trading involves buying a stock at the opening market time, and selling it at closing time. So, day trading is secure in this sense, because there is no risk in losing money overnight. The day trading strategies here vary; some involve owning a stock for a couple of minutes, while others tell you to hold on onto it all day. It all depends solely on you and how you play the market.
Obviously, the goal of day trading is to increase profits as much as possible while minimizing risk. If you really want to make a profit, for each trade you need to be able to put a lot of money at risk Also, if you see that you are gaining, take your money there and then, instead of getting greedy and keep waiting longer. Also, if you see a loss, however minor, sell quickly to minimize further losses. If you buy a stock and it starts to drop, sell it immediately, instead of hoping that it will go up later. You may lose hundreds of dollars for every second of hesitation!
You must also know the technical analysis, like yearly charts and three minute charts. Your trading platform will have to be as fast as possible, and have all the necessary tools and charts available, sine these will help you make more informed decisions. Knowing your stock and the market thoroughly will make you successful at day trading for a living like nothing else!
For more information, go to: http://en.wikipedia.org/wiki/Day_trading
