Are You Really Researching Day Trading?
As the market rebounds from crash in ‘08 and the early decline of 2009, more and more online investors are once again turning their sights to day trading. I wonder, when Edison invented his ticker tape machine, if he could foresee the future he helped to create. The tape has been replaced with a digital screen, but the effect is the same, instant gratification. With the right training, knowledge, and software program, anyone can trade with the pros. Yes you can trade with them, but does that make you one. Before we can determine what a day trader is, we must first investigate the term and meaning as they relate to you.
Many so-called experts lump all online traders into the bag of day trading. For the sophisticated observer it is plain to see the obvious differences. A day trader rides the rush of the asset, while a swing trader diagnosis the trends and holds onto it as long as the momentum last. I don’t know if the term “day trading” ever existed before we had access to the internet. If it did, I some how would picture a broker becoming a bit frazzled, trying to keep up with this mad client who is buying and selling at the speed of light. Because this, is the life of the day trader. They do not care about fundamentals or even for that matter what the company does. They are riding the trend, up or down it doesn’t matter, as long as the asset is behaving the way they have projected it would. Day traders don’t care what markets they are in, be it stocks, options, currencies, or futures, they get in and out with a fast profit. A transaction may last a few minutes, an hour or so, but never more than that day.
So it is online trading, which includes day trading, that is regaining momentum. All part time traders are swing traders, because you simply can’t monitor an asset that you might want to transact at any second, on a part time basis. These rebels of tradition are literally traders, rather than investors, but can reap huge rewards in a relatively short period of time. Of course, day trading for a living does carry some fairly large monetary risks, so you must know exactly what you are doing from the time the markets open to when they close. This is the itinerary of a day trader. If you can’t commit or don’t have the time to pursue this strategy properly, I suggest you look into swing trading.
Swinging for a Home Run
Less Risky In a Stable Market
Swing trading can be a part time effort. These types of trades are ones that last longer than a day and can run a course of up to a few weeks, as an average. Swing trading is traditionally considered a low risk venture. Especially for those who trade the large cap stocks. But is there really such thing as low risk in these volatile times? Of course you can always just keep shorting the market. I think that can be the most risky in our current atmosphere. Some experts will tell you that swing trading only works in a stable market, where the prices don’t fluctuate.
I think most regular folk always saw the market as a playground for the big cats. That was until the influx of trading companies to the internet. So how much investment capital should you have? To quote the investment companies disclosure, and I’m paraphrasing; “never invest more than you have to lose”. It is like gambling, make no mistake about it. However instead of just rolling the dice, putting your chips all on lucky 7, or hopelessly watching the little pea spin around, you can learn what is the equivalent of counting cards.
This brings us right back to knowledge, training, and you can never forget the software. Let us assume that you have some knowledge or you wouldn’t be researching the market. Any training you receive should be for technical analysis, or you are just wasting time and money. As far as software platforms, the following suggestions I strongly feel are necessary for any software to be useful.
1. It must be able to offer live streaming technical data. (Otherwise the program is merely educational)
2. The platform should defiantly include candlestick charting.
3. Visually it has to be large enough for all the data to be seen easily. (Many of the online brokerage’s technical data is to small to be useful)
4. It must be cost effective. (Most good systems can be purchased for between one to two hundred dollars)
Let the Candle Lead the Way
Include Candlestick Charting for Greater Profits
For those of you not yet familiar with candlestick charting, I will
try to give a brief but accurate explanation. The Chinese invented the market concept, and the Japanese perfected charting techniques with the use of the candlesticks. It is easy to understand this complex system, if we simply break it down to the ticks on the chart you follow everyday. We know that the lower tick is where the stock opened and the higher is where it closed. Now if we made the two lines parallel and connected them, what would we have? A candle. However, during that movement, the stock might have gone lower or higher then where it opened or closed, So our candle has formed a tail and a wick. Is it starting to make a little sense to you? Can you see the advantage of knowing this information, for getting in and out, and setting a stop loss?
I don’t profess to being an expert, but I do know of some. I obviously don’t have the time to go into all the details now, but at my site Market Mentalist you will find all you need to know about investing online. There is access to some of the top trading systems available including software, books, newsletters, and Forums. Whether you are an inquisitive novice or a seasoned pro Market Mentalist offers the online investment resource you just might be seeking.
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