+ Submit your article here

Day Trading 101

3/1/2013 12:04:50 PM | by Anonymous

Commodity Traders

Day trading is an emerging industry that capitalizes on technological advancements and the desire for a flexible schedule with the potential for high earnings.


Definition of a Day Trader

Day traders engage in the transfer of financial assets in any financial market, either on behalf of someone else, or for themselves (typically through a larger institution). The primary difference between an investor and a day trader is the amount of time each of them holds on to assets. Though both intend to profit from their investments, investors tend to have a longer time frame, while traders generally hold assets for shorter periods of time in order to capitalize on short-term trends.


The Day Trading How-to

Day trading allows individuals to speculate on market trends, along with buying and selling assets according to predicted worth. Of course, some people practice this kind of trading without the appropriate tools or resources, and then there are others who trade for the addictive, adrenaline rush. There are plenty of day traders who make a successful living. Commonly traded financial instruments include stocks, stock options, currencies, and futures contracts like interest rate futures, commodity and equity index futures.


Keys to Day Trading Success

In 1987, Hollywood gave us such memorable films as Fatal Attraction and Dirty Dancing. Audiences worldwide were also awed by Wall Street’s Gordon Gecko, who stated that "information is the most important commodity when trading, "Profitable news comes in many forms, so traders need to know when major developments occur in the financial world.Bloomberg Businessweek, CNBC, and the Dow Joes Newswire are just a few of the indispensible news sources available to investors. Additionally, day traders purchase media analysis software that helps them quickly check significant stories at a glance.


Building a Strategy

In order to succeed as a trader, the investor needs an edge over the rest of the market. Several different strategies are leveraged by day traders to earn profits, including swing trading, monitoring trading news, and arbitrage, among others. The best traders in the business spent years honing their skills until they were able to produce consistent profits and minimize losses. The experts at Online Trading Academy teach even the most inexperienced individuals how to refine their trading approach and manage their wealth over time.


Analytical software:

Top of the line trading software is a pricey but necessary tool for most day traders. In general, those who rely on technical indicators or swing trades are more reliant on the detailed data produced by the software than news. Analytical software typically contains automatic pattern recognition among other valuable features.


The Bottom Line?

Day trading is a risky endeavor that should be left primarily to those with the skills and resources needed to succeed. It’s important to note however that those traders who work for themselves and/or for larger institutions keep the markets efficient and liquid. While some critics of the craft argue that those without a background in investing should steer clear of day trading, others believe it is a viable means to financial success. Today, trading is becoming increasingly popular among novice traders, which creates a need for high-quality trader education programs like those offered by Online Trading Academy.


Author Bio: Brian Patterson is finance enthusiast with a keen interest on real-time market moves. While trying to maintain a steadfast, long-term outlook, he also dabbles with day trading to keep life interesting.

Are you sourcing for a product or service?

Do you need a quotation?