This post The Most Misunderstood Day Job appeared first on Daily Reckoning.
Day trading is one of the most-hyped — yet misunderstood — trading styles. There’s a lot of bogus information out there and plenty of misconceptions about what it takes to be successful as a day trader.
I’ve been a consistently profitable day trader for over 15 years and use my experience to teach the students in my trading challenge how to trade penny stocks and more.
Based on the knowledge I’ve gained over my career, here are some day trading tips and strategies to succeed in the stock market. Later on, I’ll show you nine mistakes I’ve made in my career, so you don’t have to make them yourself.
First off, what is day trading?
The term “day trading” is often tossed around and used incorrectly, so let’s set the record straight on what it is — and what it isn’t.
Day trading refers to the purchase and sale of a stock within the same day. If a position is held overnight or longer, it’s not day trading.
Day trading isn’t exclusive to just one market, but it’s perhaps most commonly known as a method for trading in the stock market.
Since I’m a day trader of penny stocks and that’s the focus of my teachings, here I’ll stick with day trading tips and strategies to succeed in this market.
Of course, day trading could involve buying and selling in other markets, such as the foreign exchange market (aka forex trading). But that’s not my beat.
How can you profit from day trading?
As a day trader in the stock market, you’ll use various short-term trading methods, setups and strategies to help you profit by capitalizing on the price fluctuations of stocks.
Can you profit from day trading? Of course you can. I’ve built my entire career on it. Plenty of traders are quick to say you can’t — but these are usually people who have tried it and lost money because they didn’t bother to learn the basics before they started trading.
If you put in the time to learn before jumping in with both feet, you don’t have to be one of them.
Is day trading risky? Yes, it can be. There are plenty of scammers out there who want to take advantage of you. Some brand themselves as teachers and make false promises, claiming they can teach you the “secrets” of the market and help make you a millionaire in a matter of weeks.
Others will try to take advantage of you as a new investor with pump-and-dump schemes. If you fall for the hype, you’ll likely end up as one of the infamous 90%-plus percent of traders who fail. But if you seek out a real trading education, you’ll learn to spot these scams a mile away.
Fortunately, I know how to spot the scammers a mile away. And I can help you avoid them.
And just to be clear, the risk inherent to day trading is largely what makes it possible to be profitable.
Good luck making overnight double- or triple-digit gains from Coca-Cola or Boeing or any other large stock.
Since it carries a high risk level, many traders with large accounts or financial advisers tend to steer clear of day trading. That’s why they scoff at day trading. Fine by me, because it’s less competition!
One of the big benefits of day trading is that it doesn’t require a lot of money to get started, so you can reap opportunities even if you have a small account. But you must learn how to mitigate risk.
To truly become a profitable day trader, it’s critical to learn the mechanics of the market and how to identify patterns and to master short-term trading strategies that can deliver profits.
It also means avoiding costly mistakes.
Regards,
Tim Sykes
for The Daily Reckoning
The post The Most Misunderstood Day Job appeared first on Daily Reckoning.
From:: Daily Reckoning