Talking about day trading, the term means buying and selling of stocks or indexes within the same day. Doing so, can be profitable for some and a matter of loss for others. The fate entirely depends upon your skills and knowledge about the market. To gain profits in the Day Trading System, people gather a large amount of funds so that even a small change is the price can help them collect a considerable amount of money. Here are a few strategies which can be of great benefit to the beginners who enter the market.
Strategies for entry: Stocks which show more volatility and liquidity than others are the perfect ones for day trading. A few tools that you can use in this regard are Intraday Candlestick Charts, Level II Quotes/ECN and news regarding the movement of the stocks and indexes.
Scalping: It is a smart strategy where in the person trades off his stocks as soon as he makes a profit. In this way, he does not wait for the day to end. This is true in the case of first hour trading wherein a similar pattern follows.
Fading: This strategy involves shorting of stocks when they rise. The assumptions made in this regard are many including that the stocks are overbought or the existing players are afraid to buy the stocks etc. Though this strategy is touted as extremely risky but the benefits and gains resulting out of it are immense and can enhance your gains.
Daily Pivots: This strategy of daytrading means to buy stocks when their prices are at an all time low (LOD) and is sold when the price is at its highest (HOD). The trick in this strategy is to take advantage of the volatility of the stocks.
Momentum: This strategy involves trading of stocks following the latest news on the movement of the stocks. This means to buy stocks when the trend starts increasing and selling it off at the first sign of trend reversal.
For some, it is loss and for others, it is profit. Beginners need a proper Day Trading Strategy before they enter the market. With a strategy in place, it will be easier for them to understand the functioning of the market. They will also be able to identify the kind of stocks which will give them instant as well as the greatest profits in day trading.
Frequently Asked Questions
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QUESTION:
Are there any penalties for day trading in Etrade or Scott Trade?
I do not have an acount with them and don't plan to - just curious.
I thought all brokerages allowed you to day trade in regular brokerage accounts.I know my brokerage frowns upon day trading in retirement accounts since funds must settle before buying another stock. But in a regular brokerage ther are no rules.
Rules on day trading (in regular brokerage accounts - not retirement) from ScottTrade and Etrade will be helpful.
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ANSWER:
FINRA rules say you need ,000 balance to day trade. All brokers (US) are required to follow that rule.As far as settlement. The law reads "up to 3 days". My Schwab & Scottrade accounts used 3 days in my IRA accounts (I had margin accounts with regular funds... so not effected by settlement).
I switched all my IRA accounts to another broker which has only "next day clearing" in IRA's. It's worked great for me.... Now 90% of my money is at this broker & my trading costs are 50% less. I day trade & swing trade in all my accounts.Do your homework...... read;
http://webreprints.djreprints.com/2390280139740.pdf#view=fitV,100
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QUESTION:
I would like to get into some day trading, any advice on the best place to start online.?
I already invest in IRA's and 401K, but I would like to get into something a little more could you say competitive. I want to get involved in some day trading. I would just like to know the easiest and best way to get started.-
ANSWER:
Try the stock trading simulator and great resources at
http://simulator.investopedia.com/home.aspxAbout.com: 'Becoming a Day Trader'
http://daytrading.about.com/cs/education...About.com: 'Day Trading'
http://daytrading.about.com/#bAskMen.com: 'How To Become A Day Trader'
http://www.askmen.com/money/investing_10...Day Trading World:
http://www.daytradingworld.com/...Daytrader's Bulletin:
http://www.daytradersbulletin.com/...
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QUESTION:
How does the stock market work?
I mean, I think I know the basics, but it seems like everywhere I look, someone is either buying super long-term or day-trading. Isn't there something in the middle? Also, when do you see the money you earn? If you invest 00 on something and it takes off, from like a share to a few hundred over the next year, do you just get a check for that money or what?Where should a 25-year-old guy put his money to see some nice profit when he turns 30? Is that possible?
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ANSWER:
It depends on the stock you buy. If you spend 00 on a stock you would own 50 shares of the company. If on one year it goes to 0 per share then you have profited per share (00). You can sell your share back to the company at fare market value and receive a check for 00 minus and fees from the brokerage company, usually a flat rate of a %. You can now reinvest in something else or take your money.Do you work somewhere that offers a 401k? Being 25 is the perfect age to start putting money away in a 401k - from 25-35 you can invest higher risk, usually bigger returns, 35-45 you want to do medium risk stocks, then after 45 you want a lower risk and lower return but a safer investment. You can also put money in a Roth IRA, this allows you to invest money, take it out at retirement tax free. There's no better time to start saving. Good Luck
I just was reading the other answer that was given - first we owe China not 8 billion dollars but close to 350 Billion dollars. They have said that SS would be gone for the last 50 years - it won't. We are not in a depression we are in a recession (big difference.) The market will come back, not tomorrow but it will come back. But that is neither here nor there, investing in anything is a risk, it doesn't matter if you invest in coke or paper. The benefit to a lot of 401k plans is some employers match what you put into the plan to a certain %. Its free money, that you can take at 49 1/2. The benefit of a Roth IRA is it Tax free when you take it out. Look to diversify to investments - you have plenty of time to make money at 25.
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QUESTION:
How often can you trade between mutual funds in a ROTH IRA?
I have a Roth IRA through USAA. Within the ROTH, I have a few mutual funds. I was wondering if there is some kind of restriction that would restrict the frequency I can exchange between funds. Anyone know?-
ANSWER:
There are no Roth rules, but many individual mutual funds have rules to discourage frequent trading, like a 1-3% penalty fee for selling shares within 90 days of buying them. You'll have to check the prospectus or call USAA to see if those restrictions apply to you.
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QUESTION:
What do I do if I want to move my IRA to a different company?
I currently have one with Fidelity. I don't like them charging .99 for stock trades. I want to move it to Zecco (10 free trades per day up to 40 free trades per month then .50 thereafter, which I like). So do I move my IRA to Zecco? Or can I have two IRAs at the same time?
I forgot to insert "how" between the words "so" and "do"
Source: http://tradinggold.net/?p=37809
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