Being the largest market in the world, the forex market has also the highest trading volume of over $5 trillion. With that, thousands of traders from around the world are trading every second and earning Online Trading Bonus. And every trader has his own unique style of trading. One of these trading styles is day trading.
Expert HQbroker Online Trading Review say that Day Trading is a whole lot different from investing. Day traders hold their securities for only one day. They close their trades at the end of the day, and then start all over again the next day. Compared to other trading styles, swing traders hold securities for days to months, while investors sometimes hold for years.
So what’s the point of day trading? For starters, day trading reduces risk because there’s no chance that your trades will be affected on an event that can cause huge losses.
On the other hand, when investors have gone to bed and know that their position is safe, they wake up the next day and found that the company has announced weak earnings, or has filed for bankruptcy.
Originally, day trading was only available to financial companies, because they had access to the exchanges and market data. But when advance technology emerged, individual traders now have direct access to the same exchanges and market data, and can make the same trades at a very low cost.
Day trading is time-consuming, and requires a lot of discipline. Traders work on their front screens throughout the day, and react quickly to blips. News events often cause market volatility, so traders must be ready at all times to respond at a moment’s notice. They make quick and smart decisions, and their ability to earn money depends on executing successfully a large number of trades that generate small profits.
Additionally, if a day trader is making such small profits, remember that day traders make 25 to 30 trades a day. Therefore, they multiply their profits by increasing the volumes of trades.
If you want to become a day trader, you must consider first the typical aspects of this type of trader. Day traders are usually well-established in trading, and have in-depth knowledge of the forex market.
They also must have the sufficient capital to capitalize efficiently on intraday price movements. Day trading doesn’t guarantee you to make money. That’s why day traders use risk capital to protect them from financial disaster. Not only that, but it also helps eliminate emotions from trading.
Strategies play a huge role in day trading;not only for this particular type of style, but all the other trading styles as well. Some of the most widely used strategies for day trading are arbitrage, trading news, and swing trading.
Another factor that a day trader must apply is having the discipline. The best and effective strategies are useless without discipline. Many day traders end up losing a huge amount of money because they fail to make trades that meet their own goals.
If you want to become a day trader, remember that you must have the discipline and knowledge in trading. You have to be patient and quick in making decisions. However, some days there is nothing good to buy. Other days, it seems like every trade loses money. Whatever you’ll face, don’t let these discourage you. If you want to become successful in day trading, let a broker assist you with your trades. Your broker can also expand your knowledge in trading.