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 commodities and stocks is more like a highly lucrative job. You need a number of firmly ingrained habits to be successful at it.
The first thing you need is a great sense of time. Anyone who has trouble getting up first thing in the morning or needs to jumpstart with that first cup of coffee will only be miserable day trading. That's because the best time to figure out what you'll be doing on the market on a particular day is right before the opening bell. That happens at nine am in New York City - six am in California and five am in Hawaii and Alaska. You can't just be an early riser, though. You also have to have an excellent internal scheduling system and clock.
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.
I should point out that you don't have to be a mathematician to do this. You can learn how to analyze the numbers correctly, even if you're not fond of math. There are quite a few numerical skills that can turn into second nature, as long as you get well into 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.
Habit number four is dedicated research. Day trading won't require going through accounting statements to the degree that conventional long term investing does, you do still need to have a constant inflow of analysis and data. You also have to be proactive about the shares you buy and sell. That means making quick, accurate judgments and acting fast. The only way to make the correct judgment calls is researching properly. However, you shouldn't let the need for research paralyze you.
Remember that you don't actually have to analyze most of this data or do most of this research. That's because the best traders have access to plenty of tools, including a number of different data services and research tools.
If day trading appeals to you as a new career, you'll have to build up a support network. You'll need to find some investors willing to help you apply leverage, as well as a good broker.
If you believe that you have all these skills, day trading offers an exciting and fascinating way to make a huge income. It's a job you can honestly consider fun, and if you have what it takes, it'll be pretty enriching, too. - 16928
Day trading commodities and stocks is more like a highly lucrative job. You need a number of firmly ingrained habits to be successful at it.
The first thing you need is a great sense of time. Anyone who has trouble getting up first thing in the morning or needs to jumpstart with that first cup of coffee will only be miserable day trading. That's because the best time to figure out what you'll be doing on the market on a particular day is right before the opening bell. That happens at nine am in New York City - six am in California and five am in Hawaii and Alaska. You can't just be an early riser, though. You also have to have an excellent internal scheduling system and clock.
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.
I should point out that you don't have to be a mathematician to do this. You can learn how to analyze the numbers correctly, even if you're not fond of math. There are quite a few numerical skills that can turn into second nature, as long as you get well into 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.
Habit number four is dedicated research. Day trading won't require going through accounting statements to the degree that conventional long term investing does, you do still need to have a constant inflow of analysis and data. You also have to be proactive about the shares you buy and sell. That means making quick, accurate judgments and acting fast. The only way to make the correct judgment calls is researching properly. However, you shouldn't let the need for research paralyze you.
Remember that you don't actually have to analyze most of this data or do most of this research. That's because the best traders have access to plenty of tools, including a number of different data services and research tools.
If day trading appeals to you as a new career, you'll have to build up a support network. You'll need to find some investors willing to help you apply leverage, as well as a good broker.
If you believe that you have all these skills, day trading offers an exciting and fascinating way to make a huge income. It's a job you can honestly consider fun, and if you have what it takes, it'll be pretty enriching, too. - 16928
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