to the Day Trading page

Below we will discuss day trading, what it is, techniques used to day trade, resources to learn day trading such as books, courses and dvd's for beginners to day trading, the pros and cons and generally places to get more information on this ever popular trading technique.

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Well  the dictionary definition for day trading according to Wiki.com is as follows.. "Day trading refers to the practice of buying and selling financial instruments within the same trading day such that all positions are usually closed before the market close for the trading day. Traders that participate in day trading are called active traders or day traders."

So basically it is the opening and closing of a share/stock position within the same trading day in the hope to create a monetary profit on the closed trade. Allot of day traders open a position and don't close it for a few days. Technically this is not day trading as it is not completed within the same day. I think you get the idea.

In the past Day Trading was a "sport" of the trading elite such as investment bankers and portfolio managers at big investment firms who traded all day long but this style of trading has become ever popular with mum and dad investors and the general public with the advent of the internet and extremely low cost online brokers. Many people have mastered the art of day trading now and it extremely popular due mainly to the fact that trading can be done form the comfort of their own home. Think about it, trading from home, your own boss and quiet often making a very attractive living from it.

When looking for a suitable trading broker look for an online discount broker with competitive trade prices. Brokerage can take the lions share of profits if your not careful. some brokers also offer incentives that are aimed at people making multiple trades per day by making their brokerage fees cheaper the more trades that are opened and closed.

Day trading can be done on a number of instruments apart from physical shares/stocks. Trades are often placed on instruments such as stock options, currencies (forex trading -  for more info on forex trading visit our forex trading page here), futures and contracts for differences (CFD's). All these instruments have varying degrees of risk. Make sure you understand your risk profile before committing money into the financial market.

To learn more about day trading in depth we recommend reading some good quality books before you start like the ones below. look at them as your #1 investment!

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For more great day trading books click here

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There are quite a few different styles and forms of day trading such as scalping which is an intra day technique where the position is normally only held for a few minutes, Shaving is a method which allows the trader to jump ahead by a tenth of a cent and a buy and a sell order is often completed in under one second. Instead of bidding $6.10 per share, the scalper will jump the bid at $6.101, This will make the day trader the highest bidder so he will get the first shares on offer by jumping the que. When the best offer price( the price the sellers will part with their shares) is $6.11, the shaver will again jump first in line and sell a tenth of a cent cheaper  for a tiny profit. This might not sound like much but imagine that the day trader is buying and selling share mounts in the order of 10 or 20,000 shares. It quickly ads up especially if many trades are being conducted throughout the day which is often the case.It is of course also high risk. Imagine this scenario. You purchase $50000 worth of shares and then just before you sell the company you traded in goes into a trading halt. When it reopens you could have lost allot of money.

There are many other trading techniques such as trend following, range trading, contrarian investing, rebate trading, price action, news playing and artificial intelligence. As day trading has many different methods you should really read a few books to understand the subject in full. Then learn by error.

Before you start day trading make sure you understand the risk.

Again we recommend familiarizing yourself with the techniques and lingo used by buying some books. There are many to choose from above.

There are a number of thing to consider before heading down the path of becoming a home day trader. Firstly you must understand that day trading is one of the riskiest investment styles you can chose. Many people have made allot of money from it but many people have also lost a lot of money. So recapping there are huge profits to be made in very short periods of time, but on the flip side there are also huge losses to be made.

day trading is often seen as a gamblers game by many other investors, however many people have made a consistent living from day trading and some of them have made millions of dollars per year. It's like anything, some people will and some people wont but as long as you're dedicated and have a proven strategy to go on there is no reason that you too can't become a successful trader.

Another benefit of day trading is that you can learn it and master it in the privacy of your own home, then when you are ready to day trade you don't have to put on your work clothes, then drive in traffic only to be told what to do by your boss. You will effectively become your own boss. This is probably one of the biggest reasons that day trading has become so popular.

There are literally hundreds of software programs available to the individual these days which literally tell you when to buy and sell. some even place trades on your behalf. Some of these trading programs have come under scrutiny and labeled scams which make no one rich except the designers selling it.

Well because there are so may different day trading software programs available we can't comment on every one. Just do your research and make sure you know what you are getting before spending your hard earned cash. Trading systems can be anywhere from $100 right up to extremely advanced systems costing as much as $ 45,000.

We have reviewed a few different trading systems which work on our product reviews page. Just look for the programs under Day Trading by clicking here.

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