Day Trading Example

Individuals who attempt to day-trade without an understanding of market fundamentals often lose money. A working knowledge of technical analysis and chart reading is a good start. But without a deep understanding of the market and its unique risks, charts can be deceiving. Do your due diligence and understand the particular ins and outs of the products you trade.

Many day traders end up losing money because they fail to make trades that meet their own criteria. As the saying goes, “Plan the trade and trade the plan.” Success is impossible without discipline. To profit, day traders rely heavily on market volatility. A day trader may find a stock attractive if it moves a lot…

There are two primary divisions of professional day traders: those who work alone, and/or those who work for a larger institution. Most day traders who trade for a living work for large players like hedge funds and the proprietary trading desks of banks and financial institutions. These traders have an advantage because they have access to resources…

Professional day traders—those who trade for a living rather than as a hobby—are typically well established in the field.3 They usually have in-depth knowledge of the marketplace, too. Here are some of the prerequisites required to be a successful day trader.

If you’re determined to start day trading, be prepared to commit to the following steps:7 If you follow these simple guidelines, you may be headed for a sustainable career in day trading.

Individual traders often manage other people’s money or simply trade with their own. Few have access to a trading desk, but they often have strong ties to a brokerage due to the large amounts they spend on commissions and access to other resources. However, the limited scope of these resources prevents them from competing directly with…