Day Trading: The Ins and Outs of Day Trading as a Career – the debt hawk
Are you considering the option of day trading as a full-time career? I believe that, and in my experience, it is an option worth considering as there are several benefits to investing on the global financial markets as a career. Let’s start at the beginning by explaining what day trading is, and how you go about investing in the global financial markets.
There are many questions that need to be asked and answered around the whole concept of day trading. However, as many sources note, there is a fair amount of controversy surrounding this type of financial market investments. Consequently, it is known as one of the most misunderstood topics on the global financial markets. In this article, I hope to extrapolate on the concept of day trading as well as clear up some of the more obvious misconceptions.
What and why?
“Day trading is the regular practice of buying and selling one or more security positions within a single trading day.” – Michael Lewis
It can occur in any of the various financial markets; however, it is most commonly used amongst options and Forex traders. Essentially, day traders employ short-term trading strategies to capitalize on the small price movements that their chosen assets make during the day. In other words, they make a profit from the difference between the buying and selling price of an underlying assets, and they tend to provide much of the liquidity in the markets.
Day traders keep the markets moving by their utilisation of computer-assisted investment software in order to place their trades. You will find most day traders sitting behind their computers keeping a close eye on the price movements of their chosen assets.
When and how?
Day trading is a short-term activity; its risk profile is lower than long-term trading strategies. Because trades are opened and closed in the same day, investors are not impacted by what happens between when the markets close for the day and open the next day. Long-term investors run the risk of going to bed at night only to discover that the market has dropped overnight.
It is also important that day trading does not get confused with pure speculation or the means of providing a gambling high. Professional day traders (who trade for a living) are highly skilled, they have an in-depth knowledge of the global financial markets, and they how to place successful short-term trades.
In case you are interesting in considering day trading as a career, here are several tips on how to go about ensuring that you are successful in your new venture:
Choose your online trading partner wisely
The advent of the information age has allowed for a plethora of online trading brokers to pop out in the online marketplace. Some are bona fide companies who take pride in ensuring that their clients are successful when trading in options via their online investment platform, while other companies are fly-by-night brokers whose interests are purely self-serving.
This point cannot be stressed strongly enough. You cannot trade in securities, options, indices, or Forex if you do not have an intimate understanding of how online share trading works. You need to learn what the different investment strategies involved in day trading are, how to research the price movements of your chosen assets, as well as how to read analytical statistics presented in graphs and charts. As a means to this end, your online broker should provide a comprehensive education centre as well as daily analytical reports to help you learn to trade properly and to make the right investment decisions.
Your broker’s education centre should consist of at least a trading academy with suitable training material for everyone from beginner to advanced traders. It should also consist of a list of tradable assets that the broker offers, a FAQ section, as well as a glossary.
Stick to your strategy
Once you have done the requisite research and decided on an investment strategy, it is important to stick to it. It does not help changing your mind halfway through the trade. This will end up costing you money as well as knocking your confidence in your ability to invest wisely as a day trader.
Day trading, or any financial market investments is not for the faint-hearted; however, if you arm yourself with knowledge and do not vacillate over your trading decisions, you will end up making a success as a professional day trader!