Article Contributed by Rockwell Trading
Have you ever thought about becoming a day trader? Is online day trading for a living a lucrative field? What about the risk that is associated with online day trading? This article will educate you about the various types and means of online day trading, key terms and issues associated with it along with their benefits and shortcomings.
Note: The info presented in this article mainly applies to online day trading. But these principles can also be used for forex trading, options trading and currency trading.
What is Day Trading?
Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions will usually (not necessarily always) be closed before the market close of the trading day. The goal of the day is to capitalize on price movement within one trading day.
But don’t be fooled by all the glory of day trading. Day trading is extremely risky and can result in substantial financial losses in a very short period of time. This is not a game for the indecisive or faint of heart.
Day trading is like running any other kind of business. It is serious business where you could lose everything within minutes because of wrong information.
Here are some tips that will help you to succeed with online day trading:
- Start trading, making small gains and becoming comfortable with your feelings, and use discipline as your main weapon.
- Become familiar with the functions of your trading platform before you trade real money.
- If you lost, analyze the situation and identify where you have been wrong.
- Be flexible.
- Keep learning. In fact, the day you feel you have mastered the markets, that’s the day you get your head handed to you.
Characteristics of Successful Traders
If you want to succeed with online day trading, then you should do exactly what the professional traders do:
- The most successful traders have a methodology or system that they use in a very consistent manner.
- Successful traders protect their accounts.
- Winners trade systems with high positive expectancy, sound money management strategies, minimal degrees of freedom to avoid curve fitting, and then puts the system into his business plan for implementation.
- Successful traders do not hang on to a losing position hoping the market will go their way eventually.
- Successful traders have “No Fear” to take the next and the next and the next trade no matter what.
The more disciplined you are in trading, the more profits you will make longer term. Human emotions are always the key to either success or failure in any business. Never let a gain turn into a loss. Decide each day how much you are willing to risk and stick to it. As a beginner day trader, you will want to use a really simple strategy or method to trade.