Day trading facts:
What is day trading? Day trading is an investment method that is practiced by traders who makes several trades per day. They buy and sell stocks, stock options, currencies, futures and commodities on the same day.
How is day trading different from swing trading? Day trading is a one-day thing. Meaning, you buy a stock, currency, future or commodity at the beginning of the day and let it off at the end of the day. For swing trading, it is a few days thing. Meaning, you keep what you invest in for a few days before selling it back into the market.
What is the capital involvement with day trading? It depends. It will be quite high if you are trading with cash but extremely affordable with you are day trading using leverage.
Rules for day trading? Always trade with the trend, Cut losses short but using stop loss and never get emotionally involved in your trades.
What is the most suitable financial instrument for day trading? High-volume stocks and currencies (forex).
How does a day trading transaction occur? Example: At 11:00 am today, a trader buys 1000 shares of stock ABC. The trader notices that the price has risen by ½ (0.50 cents) at 11:10 am, he sells it and making him $500 in profit that trade.
Can you be rich with day trading? Yes
Is Day trading easy? If you know what you are doing, day trading is easy. But if you don’t, you could potentially lose alot of money.
