Day trading: an exciting world of tense drama as traders make or lose a fortune every day. Day traders make split second choices based upon their analytical skills, always hoping to beat the market - the great leveler!The success of a trader depends upon his alertness, risk-taking ability and analytical skill. But in the final analysis, the successful day trader is above all else lucky!
What are the characteristics of a day trader?
Bear in mind that a day trader believes in the saying 'all is fair in love and day trading.' Right from holding positions on long trades (buying first at low prices to sell later at higher prices) to short selling (the exact reverse of long trades) selling first at high prices in the expectation of covering when prices fall later in the day) to speculating wildly, unworried by the fundamentals and hardly ever, giving a glance to the technical aspects of his trades.
Let us look at some more of what it takes to be a day trader:
Day Traders:
1. want to finish the day with no open deals
2. try not to listen the many rumours that float around
3. are strong in analytical skills - usually not just in their own field
4. Are not distracted by market sentiment
5. are active in both bull and bear markets and know how to profit from each
6. are good at math
7.keep abreast of the latest regulations, taxes, trading fees, , etc.
8. are not worried by the movements of financial indicators such as NASDAQ or DOW JONES). They are confident in their own skills.
Do you want to become a day trader?
Starting as a day trader is easy. You can become a day trader by opening a trading account with either a brokerage company or your own bank, if it offers trading, or even with a stock exchange. There are some legal and commercial details to deal with before you start trading on an exchange. You can become a day trader in any of the following fields.
1. Commodities - these are metals, oils, wheat etc.
2. Forex - this is foreign exchange - currency)
3. Stock - bonds and securities (shares)
Just making the decision and doing the paperwork will not really make you a day trader. Day trading is, as much as anything else, an attitude of mind. You have to be as clear minded and focused as the hunter stalking his prey. Nothing else matters but making the deal, closing and taking the profit - or if losing, in cutting losses and moving on.
What makes you buy or sell
The trader can not afford a mistake. The risks the trader takes convert into real earnings on reacting rapidly to two things:
1. Liquidity (The volume of trade that decides whether you should enter or leave)
2. Volatility (Price fluctuations to decide the number of trades on a particular stock, either to short or long sell and the price of trades)
At close of a days trading, your position should be back to zero and you either walk away in tears or with joy. And there is always tomorrow
Source : www.articlecircle.com/finance/investing/day-trading-what-does-it-take.html
