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If you look at some websites around the net you'd think that day trading was some kind of disease
or something. So much bad press surrounds it that you would thing that anyone who tries it must
be nuts! So what exactly is day trading anyway?
That's easy. Day trading is simply entering a trade on or after the opening of the day's trading
session and exiting a trade on or before the close of the day's trading session.
So logically the length of a day trade is no more than a single day.
Does short-term trading have risks? Of course it does. In fact all trading and investing has risks.
Day trading became popular when the availability of real-time market data expanded to the
masses. It appears that many trader became more fascinated with some of the fast-paced action
rather than with the actual bottom line. It is true that some traders need more action than others
and day trading may provide a way for those traders to satisfy their need for trading action.
Day trading is a method of trading and as such it is a tool. Now this may or may not be the right
tool for you to use to build your fortune, but that depends on far too many factors for us to go into
in this brief introduction.
A Few Advantages
No over night positions - With the volatility of the markets constantly changing there are people
who definitely prefer to be flat (holding no open positions) at the end of the trading day.
Rapid Feedback - Day trading gives you rapid feedback which allows you to see how well your
trading system works in a relatively short period of time. Please keep in mind that making a fortune
in the market is not a short-term proposition although the time frame you trade in may be.
A Few Disadvantages
Typically increased transaction costs - Transaction costs are typically higher because trading
frequency is typically higher.
Typically does not take advantage of a large move - Trend followers live for the big move and day
trading is simply not equipped to take advantage of the big move. Some would consider this to be
a big disadvantage although day traders would argue that they make enough smaller profits to
equal or surpass the profits in a big move.
If you choose to day trade or do any other type of trading, remember that there is absolutely no
substitute for preparation. Dot your i's , cross your t's and prepare to trade successfully.
To Your Trading Success!
Stop wasting precious time and energy searching for the latest Investment Advisor tips, tools, and
systems by visiting http://www.YourInvestmentOptions.com - a popular site that takes pride in
providing the most up to date info on stock trading and investing for traders of all skill levels.
Article Source:
http://EzineArticles.com/?expert=Tony_Hosea
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