There are several markets for day trading like currency, stocks, futures and commodities. Many people have heard the buzz about day trading. They have all heard the stories of fortunes being made and lost. With day trading accessible to anyone with a phone or Internet connection, along with the lure of tax free trading it is becoming more popular then ever. With its ever increasing popularity, many more people are asking themselves, what is day trading? Day trading is a style wherein traders either sell all long positions are sold or cover short positions at the end of the trading day.

Some Facts You Should Know In Day Trading:

1. Day traders typically suffer extreme financial losses in their first months of trading.

2. A disciplined day trader can make more money faster day trading, and with less risk, than the average stock trader.

3. In day trading, you usually finish the day with cash in hand, to avoid holding any risks.

4. Most of the day trading systems have about one to three trades each day.

5. One of the biggest enemies of a trading system is transaction costs.

Some Benefits Of Day Trading:

1. One of the benefits of day trading is that since the positions are closed at the end of the trading day, any sudden news of events doesn’t affect the opening prices of trading.

2. The main advantage of day trading is that one’s stock positions are not held beyond the current trading day.

3. Secondly, day trading allows for lesser speculation as the trader may not see a lot of variation in the values during a span of a day.

4. Awareness regarding day trading stock picks allows a day trader to gain maximum returns from the market.

Some Tips For Day Trading:

1. Like all broker-dealers, day trading firms must register with the SEC and the states in which they do business.

2. One point to remember in stock market day trading is that there is a limit on the gains from a single share.

3. If you plan to invest your money in day trading, make sure you do not put in all your hard earned savings in one go, as this might prove to be quite dangerous for you.

4. In order to use several markets simultaneously, good trading software should be able to open several windows by dividing the screen.

5. Follow the day trading system rule by remembering the number of open positions.

The Forex Trading;

Forex Trading generates a volatility of 500 versus 60 to 100 in liquid stocks, and there are no transaction fees or commissions in the trading of currencies. Day trading, despite differences in times zones throughout the world, is also popular because the forex market remains open 24 hours a day. There are many forex-trading companies that can train you for day trading so that your transactions are not reduced to gambling.

Trading Software:

Good trading software could cost as much as $1,000, but it ensures high-quality service by helping the user to develop and check indicators under different scenarios. Trading software is not only important but necessary to survive in today’s competitive market.

Some Trading Media:

1. While there are many day traders who do their trading using only the computer, there are others who trade using telephone and mobile phones.

2. The computer age and the Internet revolution are the foundation for electronic day trading.

Day Traders Should Be:

1. A person is considered a day trader when they can accomplish four or more day trades in a five business day period and has two unmet day trade calls in 90 days.

2. In day trading, the trader does not hold stocks until the next day; instead dispose it off by the end of the day.

3. Day traders are more particular with buying and selling not the bottom line.

Be honest, now. Back in ’99 when seemingly every waiter and grocery-store clerk had a stock portfolio, did you get rich day trading? Back in those good old days there was plenty of talk about making money day trading, but how many people do you know who actually accomplished it? One look at a 10 year Nasdaq chart leaves no doubt that some people did get rich on the way up–and a few of them probably had the good sense to get out before it was too late. But most people ‘played’ the market–and lost–through mindless buying of mutual funds, and by accepting worthless corporate stock options in lieu of actual pay.

Fast forward to 2007. The Dow is at its historic high and the Nasdaq is roaring back to life. It doesn’t take a genius to realize that now is the time to think about trading again. But truth be told, most people will not take the initiative to make their own trading decisions. Most people will get burned all over again.

To really profit from the coming bull market you must commit yourself to making your own trading decisions. Don’t trust your broker, your boss, or your brother-in-law. Only by assuming responsibility for your financial future can you expect to achieve success; nobody is in a hurry to do it for you.

Most people who do decide to trade on their own hook will naturally think of day trading. And you can bet when the bull market takes off plenty of pundits and gurus will be urging you to day trade. But for most people day trading isn’t a viable option, either because they can’t afford to sit in front of a computer screen all day, or because they have enough common sense to realize day trading is a lethal game. So how can you profitably trade?

The answer for many people is swing trading. Swing trading is the practice of holding stock positions (long or short) for a few days to a few weeks. You don’t need to sit in front of your computer all day with your finger on the panic button, and you don’t have to play cat and mouse with market makers looking to hang your scalp on their wall. The typical moves made by a stock during a swing play will dwarf the tweenies that day traders salivate over, and with sensible use of stop orders you won’t need to lose sleep at night fretting about the risk.

Day trading is a little like the World Series of Poker. Do you think you could sit down with Greg Raymer or Chris Moneymaker and beat them at a hand of No Limit Texas Hold ‘em? When you day trade you’re taking the same chance. The people on the other side of your trades are professional market makers. What the stock will do in the next day, week or year may be beyond the control of any one person, but what happens in the next 15 seconds depends entirely on the decisions of individual traders. Your loss is their immediate gain, and these guys (and gals) have been doing this for a long time. Even the most perfectly formed setup quickly turns into a sucker-play because these professionals know the newbies will take the bait. In the world of day trading, the losers get their hat handed to them in short order.

With swing trading you get the same fair chance as everyone else, institutional traders and individuals alike. As long as you trade stocks with a reasonable amount of volume, you can rest assured that no one trader, or even a group working in unison (which would be illegal, to boot) has the resources to bully the market. Setting your stop 5% below your entry point virtually guarantees that you won’t get scalped (it doesn’t guarantee the stock won’t move 5% against you, but if it does it won’t be because one trader decided to scalp you). And the profit potential for a well played swing trade could be 10% in a few days, or maybe 20-30% in a few weeks. Of course, it takes knowledge and experience to identify the right trades, but your chances of success are just as good as any Wall Street trader if you’re willing to take the time to ‘plan your trade and trade your plan.’

Truly outstanding bull markets only come along a few times in a lifetime. Swing trading gives you a realistic chance of profiting from those great bull markets. You already missed the last one in ’99. Don’t miss out on this chance. Now is the time to start studying up on swing trading so you’ll be ready.

Author: Todd Strickland
Article Source: EzineArticles.com
PCB Prototype & Manufacturing

Day trading or swing trading refers to the practice of buying and selling multiple stocks within a single day. It is the perfect vehicle for the short term intra-day type trader , who would like to hold on to a position for a short time, a few minutes or a few hour, and squares their positions prior to the end of the day.

Day Trading

The stock or futures day trader is someone who is making trades intraday. They tend to do this with frequency throughout the day. A day trader may trade a few times per day or dozens of times per day.

Swing Trading

The swing trader could be a stock, option or futures investor. This type of trader is looking to take strategic bites out of the stock market that can stretch over a day or multiple days and weeks.

Long Term Swing Trading

The long term swing trader is very much like the regular swing trader, the only difference is their focus is on weeks and months as opposed to normal swing traders who focus on singular days.

• Day and swing trading involve taking a position in the markets with a goal of squaring that position before the end of that day.
• A day trader typically trades several times a day looking for fractions of a point to a few points per trade, but who close out all their positions by the end of the business day.
• A swing Trader has slower cycle of trades, meaning less trades to make, therefore fewer commissions, but also less chance of mistakes and an increased ability to “snag” the more significant multi-day profitable swing trades.
• The goal of a day or swing trader is to capitalize on the price movement within a market trading day.
• Unlike investors, a day trader may hold positions for only a few seconds or minutes, and never, ever overnight.

What Day Trading really means?

“Day trading ” is a widely misused and misunderstood phrase or term . Officially day trading means to not hold on to your stock positions longer than the current trading day; simply put, not holding any stock position overnight. this is really the safest way to day trade, because you are not exposed to any of the potential losses that can occur, while the stock market is closed due to news that could affect the prices of your stocks. Unfortunately, a huge percentage of people who claim to be “day trading” hold stock positions overnight because of fear or greed, thus setting themselves up for the loss or decreasing of their capital. With the fluctuation of trading currencies, the term “day trading” changes a little bit. Since currencies can be traded around the clock, 24-hours-a-day, there is no such thing as “overnight” trading. So you can have open stock positions for longer than a day with active stop losses that could be activated at any time.

Day trading has been divided into a few distinct styles, including:

Scalpers: This particular style of day trading uses the rapid and repeated buying and selling of a large volume of stocks within seconds, minutes or hours. The goal is to earn a small profit share on each transaction while minimizing the risk.

Momentum Traders: This particular style of day trading involves identifying and trading stocks that are in a moving pattern during the day, the goal of this type of day trading style is to buy such stocks at bottoms and sell at the tops.

Advantages of Day Trading

No Overnight Risk: Since positions are closed prior to the end of the trading day , news and events that effect next trading day’s opening prices do not effect your portfolio or your capital, you have what you had at market close the previous day.

Better Leverage: Day traders have better leverage on their trading capital because of the low margin requirements as their traders that are closed in the same market day. This increased leverage could increase your profits if used correctly .

Ability to profit regardless of Market Direction: Day trading often will utilize short – selling trading to take advantage of declining stock prices. The ability to lock in profits even as market falls throughout the trading day is extremely useful during bear market condition.

Many people think day trading software and robots are illegal but in reality they are perfectly legal and a vital tool for most day or swing traders. I personally use Day Trading Robot because it is the best for swing trading. Most software trading robots are not designed for the many styles of trading outlined in this article only for Day trading in general.

Author: Darius Harris
Article Source: EzineArticles.com
Provided by: Guest blogger