Intro To Stock Day Trading - Risk v. Gain
Stock day trading is considered to be controversial by some people. Day trading provides a lot of fast-paced action for those who wish to trade in that manner.
Stock Day trading simply means that a stock transaction is completed during market hours. This means that no positions are held overnight. Some traders consider not holding stock overnight to be less risky.
Day trading can involve one completed transaction per day, or numerous completed transactions per day. How one decides to day trade will depend upon a number of criteria including individual trading plan, trading system, and personality of the trader.
Day traders typically look for stocks that fit into a number of criteria, that criteria might include stocks, which move a certain amount or have a certain amount of volatility throughout the day as well as stocks that are highly liquid allowing daytrader to get in and out of a transaction with ease.
As stated before, day trading can be risky. But the truth of the matter is that all trading can be risky. The SEC pays close attention to day trading, because there has been so many instances in which traders have lost large sums of money. The promises of huge an easy returns coupled with some greed and inexperience has left a bad taste in the mouth of some who have been involved in day trading.
Successful day trading is not about flying by the seat of your pants or throwing a bunch of things up against the wall to see what sticks. Successful day trading, like most successful trading is about discipline. Having the discipline to stick to your rules and pull the trigger when necessary and control your risks at all times are essentials to successful day trading.
In day trading, as with any trading, one should only risk capital that one can afford to lose… In other words, day trading with the mortgage payment money is completely out of the question.
Day trading can be very exciting and very profitable. Before you become involved in day trading prepare yourself to become successful. It’ll be important that you take your time and do not dive if headfirst into the arena of day trading without the proper preparation.
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Tags: daytrader, market hours, sec, stock day trading, stock transaction, trading system, volatile stock
