Day Trading

Day traders are primarily technical traders. They are looking for any company that has price momentum. They buy the stock, hold it while it goes up during the course of the day and sell it for a profit before the end of the trading day. The purest day traders do not take overnight positions of any sort. More experienced day traders may also short (sell stock they do not own) companies they feel will fall in price during the day. Day traders use various methods for identifying stocks that have more momentum than the market either trading up or down.

Day trading is considered very risky by most professional investors. There are only a small handful of day traders who can support themselves from the earnings from their trades over several business cycles. Many people start day trading when the market rallies. There is a saying that a rising tide lifts all ships. Day traders may mistake the market returns from beta as alpha returns from their stock selection skill. When the market turns and the market average is going down, they may lose money. Big brokerage firms may have proprietary traders, that is, traders who trade for the firm’s benefit, but they have very strict risk controls and position limits to reduce the risk of the activity.

Financial Guide Links

Commodity Futures
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Foreign Currency Exchange
Info about forex currency trading, foreign currency exchange, forex trading online, foreign exchange rates, and daily foreign exchange rates.

Roth IRA
Info about Roth IRA interest, Roth IRA info, IRA Roth, Roth IRA penalty, and self directed Roth IRA.

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