Day trading can be an excellent method for making a profit, if you have the stuff to do it. However, no matter how others may pitch it, it's not a smooth ride. You have to put a lot of work into it to succeed.
Day trading stocks and commodities is really a highly lucrative job. Just like a regular job, it needs you to have a number of traits in order to succeed, as well as a number of firmly ingrained habits.
The first thing you'll absolutely need is a good sense of time. The kind of person who's not good in the mornings or needs that morning jolt from coffee will only make themselves miserable trying day trading. That's because the best time to decide how you'll be playing the market today is right before opening bell. That's at nine in the morning in New York and six in the morning in California. If you're living in Hawaii or Alaska, it's five am. Of course, just being an early riser isn't enough. You'll also need to have a good internal clock and a solid scheduling system.
Habit number two that you'll need is having a good set of skills for quantitative thinking. You'll make or lose money in day trading just by operating on gut instinct. Making informed decisions, on the other hand, requires you to be able to look at numbers and understand them completely without even thinking about it. This means that numeracy and the ability to deal with numbers in your head is vital if you're going to tell whether something's a blip or a trend, and deal with it correctly.
You should know that this doesn't require you to be a mathematician. Numbers you'll need to know can be learned, even if you always hated math. There are a few numerical skills you can learn to the point of them being ingrained, once you get going in the game.
Successful day traders also have to have patience and skills of observation, and combine them with a short memory. This can be pretty hard to learn, since you have to avoid feeling disappointment when you don't catch a stock at the top, or when you lose money because the short you're intending just never shows up. Don't get caught up in things when you lose, and don't allow winning to take over your life, either.
Dedicated research is also a must. Day trading doesn't require you to devour accounting statements like long term investing usually does, but you do need to constantly be able to deal with the flow of data and make analyses. You also have to be proactive about shares that you're buying or selling, and make snap judgments that you act on fast. The only way you'll know these judgments are the right ones are through the right research. However, don't let this desire for good research paralyze you.
Remember that a lot of the research and analysis won't need to be done by you directly. The best traders always have a number of tools at their disposal, as well as many different data services and research sources ready to access.
If you're thinking about getting into day trading, you'll also need to build up a support network. That requires dealing with a broker, as well as finding investors who will help you apply leverage to the market. You have to understand that this is work, and that this kind of work requires intelligence, focus, and a strong will.
If you've got all these skills and can develop these habits, day trading could be a great way to make a fantastic income. This is a job you can call fun honestly, and it can be pretty enriching, too.
Day trading stocks and commodities is really a highly lucrative job. Just like a regular job, it needs you to have a number of traits in order to succeed, as well as a number of firmly ingrained habits.
The first thing you'll absolutely need is a good sense of time. The kind of person who's not good in the mornings or needs that morning jolt from coffee will only make themselves miserable trying day trading. That's because the best time to decide how you'll be playing the market today is right before opening bell. That's at nine in the morning in New York and six in the morning in California. If you're living in Hawaii or Alaska, it's five am. Of course, just being an early riser isn't enough. You'll also need to have a good internal clock and a solid scheduling system.
Habit number two that you'll need is having a good set of skills for quantitative thinking. You'll make or lose money in day trading just by operating on gut instinct. Making informed decisions, on the other hand, requires you to be able to look at numbers and understand them completely without even thinking about it. This means that numeracy and the ability to deal with numbers in your head is vital if you're going to tell whether something's a blip or a trend, and deal with it correctly.
You should know that this doesn't require you to be a mathematician. Numbers you'll need to know can be learned, even if you always hated math. There are a few numerical skills you can learn to the point of them being ingrained, once you get going in the game.
Successful day traders also have to have patience and skills of observation, and combine them with a short memory. This can be pretty hard to learn, since you have to avoid feeling disappointment when you don't catch a stock at the top, or when you lose money because the short you're intending just never shows up. Don't get caught up in things when you lose, and don't allow winning to take over your life, either.
Dedicated research is also a must. Day trading doesn't require you to devour accounting statements like long term investing usually does, but you do need to constantly be able to deal with the flow of data and make analyses. You also have to be proactive about shares that you're buying or selling, and make snap judgments that you act on fast. The only way you'll know these judgments are the right ones are through the right research. However, don't let this desire for good research paralyze you.
Remember that a lot of the research and analysis won't need to be done by you directly. The best traders always have a number of tools at their disposal, as well as many different data services and research sources ready to access.
If you're thinking about getting into day trading, you'll also need to build up a support network. That requires dealing with a broker, as well as finding investors who will help you apply leverage to the market. You have to understand that this is work, and that this kind of work requires intelligence, focus, and a strong will.
If you've got all these skills and can develop these habits, day trading could be a great way to make a fantastic income. This is a job you can call fun honestly, and it can be pretty enriching, too.
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