Day Trading: The Realities

The fastest land mammal on the planet is the cheetah. It can zoom at speeds up to 75 miles per hour. In the rapidly paced forum of trading stocks and finances in general, the day trader is akin to the cheetah, devising his moves with cat like reflexes and mind blowing speed, leaving the trend trader behind in utter bafflement. Having the knowledge to day trade can be trained, but having the intuitive ability to pick the appropriate stocks and be aware of when to move them is most likely something you are either born with or not.

It goes without saying that knowing how to day trade necessitates understanding the many types of trading, as well as the advantages and disadvantages of each type. It also helps to understand that the term "day trader" should not be predestined to imply that these traders just fly by the seat of their pants, completing hit or miss, random trades without careful consideration. There is a lot of knowledge and finesse that goes into knowing how to day trade, so you can create good trades and be successful, The ugly side of this business is you can make a few bad trades, lose all of your trading capital, and no longer be able to trade.

To begin as a day trader, it is certainly advisable that you be intimate with the stock market in general, if possible working closely with a broker, or even better find an expeirenced day trader as a mentor. Another very valuable path is to decide on a trading system that offers training and an online forum of day traders to ask questions and seek guidance. Start the ball rolling by making "paper only" trades. It is highly advised to use a trading system simulator. It is critical to record and evaluate pretend trades for performance. Be familiar with the ins and outs of the market in general before starting out on your own. Be familiar with the day trader regulations, together with how to calculate day trade buying power (DTBP) and what the new minimum equity requirements are for day traders. Awareness of margin guidelines is a must. Be knowledgeable about which market you will trade, and which is the most agreeable to day trading in general. Also identify which financial instrument (futures, stocks, currency, commodities, etc.) that you plan to trade, some of which are more effectively dealt with by the day trader, and others are better off handled in the more traditional market. As stated before, it is vital to use a trading system that is better suitable for the day trader. You must investigate which program best suits your needs and trading level.

The life of the day trader can be reasonably sedate, or it can turn into a full blown chaotic windstorm in the course of just a few hours on any certain trading day. Economic, trade and industry news may cause an assault of trading activity in the markets that may affect your every trade. You must be capable to roll with the punches, know your financial limits and perform to your own strengths. If you have the know-how and the nerves, being a day trader can earn you vast, fast returns. Remember, in life, there is the understanding how to, and the understanding why you do it. Understanding how to day trade may appear simple to those suitable to the career, but they might have more troubles answering the why.

develop a trading plan, then perform your plan with complete commitment! If you can abide by your plan with discipline, you will be well on your way to being a consistent, profitable day trader.