Day Trading is the practice of buying and selling stocks on the same day, either individually or as a part of a bigger brokerage firm, in high volumes to capitalize on small short term fluctuations in the markets. Unlike long term investors in the stock market, day traders must be able to buy and sell quickly to take advantage of these sometimes minuscule changes in the prices of securities. Often, fractions of a second can mean the difference between a big gain and a loss.
Day Trading is risky and certainly not for everyone. But with that risk comes the potential for enormous rewards if done by a skilled, experienced trader with intimate knowledge of how the markets work and a PC capable of keeping up with them. Imagine being able to make a living working from home just a few hours a day? That’s the allure of day trading.
Because day trading is done almost exclusively online these days, a lightning fast internet connection and top of the line computer hardware are absolute musts. That’s of course where we come in. To learn more about our custom trading computers, read more here.
What Does it Take to be a Successful Day Trader?
Making it in the world of day trading isn’t easy and certainly isn’t for everyone. Here are just a few of the things that it takes to be a success:
- Intimate knowledge of the markets – How do the markets, especially foreign exchanges, work? What factors make the market fluctuate and to what extent? These are the basic questions a day trader must be able to answer before even considering it. Yes, there are classes on the web that claim to be able to teach you everything you need to know, but buyer beware – many scams abound.
- Access to as many news sources as possible – Knowledge is power. In order to take advantage of the latest financial news and profit from it, you must have access to as many different news sources from around the world as possible.
- Strong Analytic software – A good analytic software will be expensive, but worth the investment for the ability to detect patterns, perform backend testing, and even connect directly to your brokerage of choice.
- Access to the Trading Desk – Usually reserved for traders working with brokerage houses, individual traders who can make instant order executions when prices begin to move have a huge advantage over the rest of the pack.
- Hardware, Hardware, Hardware – Running all of this is your trading computer. A fast processor, tons of RAM, and the ability to run multiple monitors are absolutely critical to your success.