Don’t Believe the Hype

Don’t believe advertising claims that promise quick and sure profits from day trading.

Day Traders utilize high amounts of leverage and short-term trading strategies to capitalize on small price movements in highly liquid stocks or currencies. Risk management is crucial if you want to have any hope of becoming a successful trader. Even if you`re starting out with a small day trading float, you should practice good money management. Generally, a day trader should have enough day trading capital to buy at least 1000 shares of any given stock on any particular day.

A novice day trader should normally have day trading capital of at least $20,000 to start, so this is not a business to undertake lightly. You need to trade stocks which will not make it hard for you to exit your day trading position quickly at a fair price. A day trader will rarely hold a tock overnight as there are many other opportunities and a stock that takes hours to move is not worth holding.

The benefit of day-trading can be summed up with one word: control. Day trading has become an online phenomenon in the last year which has resulted in manuals and courses on how to successfully day trade. Although day trading has become somewhat of a controversial phenomenon, its prevalence is undeniable.

While day trading has become popular, the characterizing of day trading as another mode of investing may be overstated. Limiting your losses when day trading is by far more important than making big profits. For the sophisticated investor day trading may be safe since such investors know what they are doing and are willing to absorb the risk of losing money. Day trading is not a get rich quick business.

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Explore posts in the same categories: Currencies, Currency Trading, Day Trading, Foreign Exchange, Forex, Investing, Nasdaq, Nyse, Stock Market, Stocks, Swing Trading, Trading

One Comment on “Don’t Believe the Hype”

  1. Matt Says:

    How did u come up with an arbitrary figure of 20 K to start trading? Actually the more you start trading with the more chances hat u will lose all that (and some more) within a short span of time trying to figure out the markets in many ways. The only thing i di correct was starting to trade with 1 K and immediately satrted bleeding money which of course was the tuition i paid. After 2 years and countless additions to my techniques and many inbound wiretransfers(to my account) the lose stood at around 15 K .Then i satrted turning things around by discipline , having a system, putting small trades (with high leverage still 200:1) for the equity , letting the trade come to me rather than hitting on every pair in sight whether they are still or moving.Also i focussed on pairs where i had competent information and not on any currency pairs This way i was and is still able to keep my trades profits or losses within realistic limits and expectations. My rule of thmp is this. If i have 1000 USD in equity i will do only 2 mini lots USD (200:1 leverage), putting my risk at around 160 USD maximum (for a totally adverse 80 P move) and no stops (i exit wrong trades on appropriate pullbacks ). Gain may be around 40 USD to 80 USD. So the point is if I do what i am supposed to do (follow ONLY my system) i can still improve my equity( Gains from the trades proved right) and still avoid getting liquidated (losses from correct trades from my system which went the RED way ). Hope this helps some one. Thanks Mathew


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