SAMURAI TRADING ACADEMY
DAY TRADING Trading only in a short time Mike
Day trading, in its rudimentary sense, refers to trading only in a short time period of a single trading day, and strictly not beyond it. Day traders trade stocks and securities (depending on the field of trading, but mostly stocks and foreign exchange is popular) during a day and close down by the end of the day to avoid exposure to potential losses that occur when the market is shut down and due to any news that would affect the trader’s security. While investors hold positions overnight and for days or weeks at a stretch also, day traders hold a position for seconds or minutes mostly. There are huge risks which are overcome by this method and many benefits attached to it. Since the trader does not hold on after the end of trading day, any event that would occur the following day would never affect the trader’s asset’s prices. Another aspect where day traders have an upper hand is that any trading capital has lower margin requirements for a single trading day before closure. Locking profits over falling stock prices even throughout the day is highly beneficial while trading only in a day time frame. Thus, although the risks involved are high, so are the rewards in the business of day trading. A trader, before starting out on the journey to this mystic land, must first most importantly understand that day trading is not a game of trial – and – error or sheer luck. It require a lot of hard work, conviction, dedication, flexibility, emotional stability to move past huge number of losses and still play the game with equal amount of brainwork, and analysis of data, information flow, tracking and knowledge of the depth of the trading capital. Jumping into the business blindly without knowing about or researching well into the field, would lead to ascertained losses, depression and frustration.