What is Day Trading? Day Trading vs. Investing
What is Day Trading?
Have you heard of day traders? These are people who reap the profits of Wall Street, day after day. They do nothing but trade, they answer to no one but themselves. Day trading is their livelihood, their bread and butter. Day trading is profit driven. If you have any other goal than to make money on the markets, you are probably reading the wrong item. This is not a factor for players who seek short-term thrills markets, should not be an exhibition in the trading day theoretical for the academic world. Today we cover about day trading and Day Trading vs. Investing.
Because today the market? Is it worth it? Day trading offers the path to financial freedom. The day trader is independent. He is free from office routine is not held by time or place, work when and where you think. It’s the power of day trading!
What does it take? No need to be very smart to be successful in day trading. The most successful day traders are those who have strong determination and iron discipline. Intelligence is certainly positive, but it is not an essential criterion for success. I’ve never been to the top of my class and always rejected by my exams. And then? I do a lot of money by sharing a couple of hours a day.
Do not get me wrong, I’m not profitable from day one. This article does not propose another campaign to get rich quickly. It took me almost a year of daily trading to get where I am now. Constantly review and research the different methods finally paid off. It’s hard work and not to be richer not only by reading and practicing. You can drive a car just by reading the manual? You have to practice what you learn. I hope you can learn something from this section to start your own business.
Day Trading vs. Investing
There is a distinct difference between day trading and investments. The main difference is the timing and methodology. Investing requires a much longer period of negotiation, months or years to decades. Usually, you want to select a good company that does not bankrupt the day after purchase. It will also analyze the fundamentals of the company, make sure it is financially healthy and has a competitive advantage over other companies in the industry.
Trading takes a different approach to make money. The time horizon is short a few minutes to several hours to several days, weeks or even months. More precisely, day trading refers to strictly trading within the day. This means you do not hold positions overnight. For example, if you purchase at 10:00 (EST), you must sell before 16:15 (EST) when the market closes.
There are no rules against holding overnight but risk is minimized if trading is strictly limited by the day. The market often moves in reaction to the news when the exchanges are closed. Stocks are generally not very liquid and trade on light volume after market hours. Imagine what would happen to your long position when there is a sudden hurricane strike when the contract is closed. The market will drop, but it might not be able to sell at a reasonable price due to the low volume. I sleep better at night when I know I have no open positions overnight. Whatever the losses and gains are strictly during market hours when there is enough volume to trade. As the market moves after the closing bell does not touch me and I start tomorrow with a new mindset.