What Does Forex Day Trading Mean?

August 14, 2010 · Posted in Penny Stocks · Comment 

Day trading is a way of trading that generally relates to entering and exiting trades such that all positions are closed off before the end of the trading day. As a style, it refers more to people who are willing to execute multiple trades within a relatively short period, attempting to make money off what more long-term traders would see as fluctuations.

Some seasoned Forex traders prefer this method as opposed to long-term methods for various reasons. There is instant gratification. You can see the results of your efforts in shorter periods. It can be very profitable, particularly if you have a large amount of money in your account. Large institutions engage in this sort of trading quite a bit because they have millions, maybe billions in their accounts. A very small move might earn the small-time trader – i.e. me – only a few hundred dollars. That same “fluctuation” might earn the big boys tens of thousands of dollars or more. It means that you have many more opportunities to open positions and thus, make profits. Unfortunately, it also means you have many more opportunities to lose your money. As with all forms of trading, the trick is managing your money effectively; something that is a lot more difficult when operating in shorter time frames.

One of the obstacles cited by some traders in their case against day trading is the necessity of spending more time in trading mode. This means staring at a computer screen, for most people. It can also mean listening to news, constantly browsing the information websites etc. These traders may be able to overcome the higher risks that Day Trading might entail; they just don’t have the time to do that. This is where an automated system comes in. If any of these traders could “program” his trading system into a Forex Trading Software, then that problem would be solved. In that situation, the trader no longer has to devote all that time. Other tasks can be done. When there is a Buy or Sell signal, the trader can have a quick look at the markets and confirm this by opening the position.

It is also possible to have the software enter and exit trades for you, hence the term “automated”. To use this, the trader would have to have complete trust in his system. Many automated systems are now available from a large variety of traders and gurus. If you feel comfortable enough, you can try one. It’s easy enough to test on a demo account. If you wish to try any of these on a live account, then you should start out using the signals, while you actually enter the trades yourself. They usually have a free trial period, so you can evaluate whether or not you are comfortable using them. That way, if it doesn’t work out, you can get your money back, or just not buy the full product.

As with any of the other trading styles, techniques or whatever you might choose to call them, this one has takers and those who are against it. Some experts argue that it is simply not possible to do any meaningful analysis when operating within such a short time frame. Such a sentiment is understandable. This method of trading, in their opinion, reduces Forex Trading to something more akin to gambling. They would argue rightfully that entering and exiting a trade should not be like throwing dice. There should be a clear strategy in place. This concept is just much more complicated to implement when engaging in day trading. You are also significantly more exposed to price spikes due to news. It can be a wild ride. Adding an automated system to the mix goes even further down the road in that respect.

Regardless of that, there are those who thrive on it. It’s hard to argue with facts and figures. For some people, Day Trading is Forex trading. They wouldn’t have it any other way. In fact, the first fulltime trader I met was a Day trader. He did well, making consistent profits. It’s not for everyone, but that doesn’t mean it can’t be done profitably. Ultimately, you will have to try it yourself to see how it sits with you. Who knows…you might find that you’re a natural born Day trader.

Author: Donald O Ogilve
Article Source: EzineArticles.com
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Four Secrets to Making Money With Day Trading

August 2, 2010 · Posted in Penny Stocks · Comment 

Becoming a day trader is becoming a hot means for people to earn extra money. There are people that take advantage of day trading to boost their standard income stream, while some devote all their time to bringing in money with day trading on its own. With its great earnings potential and the excitement it gives you, it’s not surprising more and more people are trying out day trading opportunities.

But, day trading isn’t an automatic entry to quick and easy money. You’ll need to know how to go about it the right way. Day trading does carry risks, but knowing how to mitigate those risks and make wise choices will provide you with the greatest chance at increasing your gains, and minimizing any falls.

The way in which you earn profits with stocks is to buy low, and deal when the price is high. Obviously, the question is – how can a trader know when to buy stock and sell?

To cash in with day trading, use these essential hints to boost your profits.

Know the market news and stay on top of the markets. You need to keep on top of developments in the news, like acquisitions, takeovers, and earnings announcements for major organizations. Having an overall feel of the stock market, including any larger shares, will prepare you to make good financial analyses.

Try not to focus on stocks that have little price movement. In day trading, cash is made by buying and dealing stocks that are frequently changing in price. When day trading you are dealing shares every day so you must be involved with stocks with daily price shifts in price each day.

Improve your mathematical analysis skills. Having the ability to understand financial data and numbers is critical to being a profitable trader. Now don’t fear – you don’t need to be a mathematical genius – but there are a few fundamental calculations that you will need to have an understanding of.

Always remain poised and steady. Those who make the most money have the ability to control their emotions at any point in time. Whether someone is overly pumped up about a big win, or largely disappointed about a loss, both of these responses can hinder your ability to stay in the game, take educated actions, and keep a clear head.

By using these day trading tips, you could be set to make outstanding profits by day trading.. With the right tools and resources, you can experience the great money making potential that day trading has to offer.

Author: Grant Dougan
Article Source: EzineArticles.com
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Forex Day Trading – Facts on Forex Day Trading

July 27, 2010 · Posted in Penny Stocks · Comment 

A day trader is any kind of trader who makes several trades per day, through buying, selling, entering and closing out a trade in the same day. When it comes to day trading this is the thing instead of trading stocks; Forex traders buy and sell currencies.

This type of trading is normally referred to as simply Forex trading. All traders whether those trading in stocks or currencies have a characteristic of attempting to increase their return by taking advantage of small price on stocks or low rate on currency changes. Unlike buying of stocks where you buy stocks from a company and wait over the years for the company to grow so that your value on stock increase, this is not an investment where you make and leave it alone to grow. It won’t grow; this is because exchange rates fluctuate very quickly.

Some people do it as a hobby others while others make a career out of it. These professionals need to be intelligent and well educated people to be able to understand the trends and charts that make forecasting possible. And also because there is no central physical market; this can be carried out all through out, be it at night or during the day.

In this world there are no exchange fees, no commissions to be paid to brokers and there is low transaction fees.

It’s the same as in the futures market apart from the fact that the liquidity is higher and the costs lower. This can be a bit risky or profitable, exciting or frustrating but one thing about doing this is that it is never boring.

Forex trading versus trading stocks
- Low minimum investment
Trading currencies requires a lot less starting capital than trading stocks.

- Leverage
Forex trading offers greater buyer power than trading stocks

-Low currencies to trade
There are only a few major currencies, whereas in the equities market there are tens of thousands of possible stocks to trade.

- Free trading program with real-time charts and news
Free online trading system with streaming, real time charts, news and commentary relevant to the currency market.

- No commissions for transaction fees
Day trading and the trading stocks get compensated from bid/ask spread.

- No trading restrictions in falling markets
There are no restrictions to sell currencies short, unlike stocks which have to be sold short on an up tick rule.

Author: Mathieu Delaborde
Article Source: EzineArticles.com
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Is Forex Day Trading For You?

June 7, 2010 · Posted in Penny Stocks · Comment 

Day trading in the forex market may sound fun and exciting, but is day trading really the way to make money? Forex day trading can be profitable, partly because the forex “day” is longer than the stock market day.

Forex has been described as a twenty-four hour market. In some respects, that is true. You can trade forex twenty-four hours during the weekdays. However, the market closes Friday evening at 5:00 pm EST. Trading volume drops off considerably after 12:00 noon EST on Friday and does not pick up again until later in the week. Some forex traders prefer to wait until a trend gets established late Monday, or even Tuesday, before placing trades.

In the U.S., a typical day trader in the stock market might place a trade at 9:30 am Eastern time when the stock market opens, and close the trade before the stock market closes at 4:00 pm. The stock market day trader has only a six and a half hour window for the trade to be profitable. The forex day trader, on the other hand, can place a trade at 7:00 pm Eastern time, during the opening of the Asian session, and has a twenty-four hour window in which to close out a day trade. That’s almost four times longer than the stock market trader.

Although forex trading occurs twenty-four hours a day, most forex day traders prefer certain times that give a higher probability of success for trades. One way to increase probability of success is by trading when there is overlap between markets.

There are four forex markets: New York, Tokyo, Sydney, and London. New York opens 8:00 am to 5:00 pm EST. Tokyo opens 7:00 pm to 4:00 am EST. Sydney opens 5:00 pm to 2:00 am EST. London opens 3:00 am to 12:00 noon EST. London has the largest volume of trading, followed by New York, Tokyo, and Sydney. Some traders consider it a waste of time to trade during the Asian or Sydney sessions, when currencies are less active. For day traders to make money, currencies must make large moves. Many forex day traders prefer the opening of the London market, the opening of the New York market, and the overlap between London and New York.

Another advantage for the forex day trader is the impact of news. Company news that might move a stock price may not occur regularly. In contrast, interest rate and economic news that moves currency prices occurs frequently in forex.

The twenty-four hour forex day is helpful for novice traders with day jobs. The full-time employed day trader, by sacrificing a few hours sleep, can gain experience in day trading without jeopardizing a day job. And because forex brokers offer demo, or practice accounts, the forex day trader can go through the inevitable ups and downs and blown accounts without risking a dime.

Author: Marcia Borden
Article Source: EzineArticles.com
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Day Trading, Swing Trading, Or Long-Term Trading – How Do You Choose To Profit?

June 1, 2010 · Posted in Penny Stocks · Comment 

There are many different ways to profit in today’s exciting stock market. Long term investing in the stock market is a good option for those who put their trust in companies that are reliable and are continuing to grow. This can yield excellent results for investors and has long been the norm in stock investing. This is not the only way to profit from today’s vibrant market as there are many different trading opportunities available.

Short-term traders can also find investment opportunities in the market. Market prices can change rapidly when traders get nervous and sell their stocks or go into a buying frenzy. This type of trader psychology can make stock prices fall quickly, and sometimes rise rapidly. This may happen even when the fundamental financial numbers don’t reflect this.

Why do traders get nervous about their stocks? It could be as simple as a rumor, or more reliable resources like news reports and government concerns about the economy. This could cause an investor to think that a company will find financial trouble or increase in value. If a stock goes up or down, some traders will dive into the stock and cause the price per stock to rise quickly. The market will once again fall back into place, but quick-witted. short-term traders are smart to watch the market and take advantage of price changes that may offer a profit.

Position Traders – Of the three styles of trading, position trading has the longest term of trading. Position trading stocks may be kept for a long time as compared with day trading and others short-term stock trading methods. These traders will choose to hold on to their stocks for months to several years. Position traders will wait for a fundamental change in the financial reports, industry analysis, or stock value before they consider selling their stock. Position trading requires little time from the investor. The stock holder will simply check the market reports daily to plan their trading strategies. This is great for the person who is just looking to make a little income on the side. The investor may work a half hour a day after their regular day of work.

Swing Traders – A swing trader is an trader who generally holds stock for a short period of time, typically from one to five days. A swing trader looks to jump on market swings. This technique of trading will require a lot of time, but also can often yield sizeable return on investment. They will usually research stocks and plan investments for several hours a day. Swing traders look for trends in the market to help map out their opportunities. They use intraday and daily charts to predict how their stock may move.

Day Traders – For those who enjoy taking risks and like fast-paced trading action, day trading is a perfect way to play the market. Those who are educated day traders have learned how to decrease their risk and maximize potential profit. A day trader is someone who buys and sells stocks very quickly. The stocks could be bought and sold for a few minutes or a few hours, but always held on to for less than a day. Day traders frequently analyze data on the tick, minute, and hourly levels. This is not the place for an emotional trader. Because this type of trade requires so much time, it is only recommended for someone who wants to do this full-time.

Author: Reginald T. Hobbss
Article Source: EzineArticles.com
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Best Home Based Business – Day Trading

May 26, 2010 · Posted in Penny Stocks · Comment 

100 years ago the majority of the worlds population had a home based business. That is the cottage industry. People either worked the farm or produced home crafts. Things like textiles, blacksmiths, candle makers etc.

Once the industrial revolution started, people left the farms and cottage industries to come to the cities to work in the factories. With today’s world of the Internet the trend has come back around to the opportunity for people to work from home again.

They are many advantages to working from home. Besides the convince factor, the saving of time and money not having to travel, there is also the ability to be your own boss and be in control of your time and not having a preset limit on your income.

Being in control of your own time means that you have to be disciplined in your work ethic. This is where most people fall down. Setting yourself a dedicated workspace and a dedicated timetable of when you are to work is one way to stay focused.

The explosion of Multi-Level Marketing (MLM) has been the beginning of this renewal of the home-based business. In the last few years the Internet has also experienced the boom of home business, with Internet marketing. This is using websites to market digital and physical products.

Websites either promote existing off line businesses, or promote online products. The main advances have been the possibility for anyone to market to everyone in the world. This opens up the possibility for small niece markets to become viable.

Secondly, Internet marketing has allowed for affiliate programs. This means that everybody has the ability to market big and small companies products and receive a commission or referral fee for it.

The other area of online home-based business is that of stock market trading. With the advances of the Internet, share prices, option prices, commodity prices, CFD’s, futures and other derivatives, are available in real time and at affordable costs.

The internet gives the ability for the average person to places trades online. Now with thousands of people trading, brokers have become far more competitive and brokerage has become relatively cheap. This has opened up the world of trading to the average person rather than just the major banks and financial institutions.

The latest products now to hit the market in relation to trading are Live Trading Rooms and Auto-Traders.

Live Trading Rooms are online chat rooms where a professional day trader trades live. New and experienced day traders watch, ask questions, and trade live or in simulation (paper trading) along side the professional trader. Trading rooms have many benefits to new and experienced day traders. New traders can learn from and copy a professional trader in real time following the trades live. As day trading can be a lonely profession, experienced traders get company and social interaction, but more importantly trading along side others can help with the mindset when you have had a few loosing trades.

Some trading rooms a professional trader will teach a particular trading system but does not call out live trades. Other trading rooms are more focused on calling the live trades for you to follow, but might not teach the trading system that they are using. The best trading rooms are the ones that do both.

These live trading rooms are setup so you can see the professional day trader’s charts and hear him call the trades and answer questions. The learning day traders normally ask questions via text-based chat. Usually other traders in the trading room can not see who has asked the question, so not to prevent anyone asking questions because of fear of embarrassment.

An Auto-Trader is simply where your trading account is set up to automatically follow the professional Day-Traders account. This means when ever the professional places a trade and whatever the outcome, either taking a profit or a loss your account will do exactly the same thing. As it is automatic once it has been set up you do not have to do anything. This is perfect if you do not have the time to trade or are on holidays. This gives you a passive income and the ultimate lifestyle.

Author: Rob Read
Article Source: EzineArticles.com
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Day-Trader and Day-Trading – What is it and How Do I Become One

May 21, 2010 · Posted in Penny Stocks · Comment 

A Day-Trader is somebody who buys and sells financial instruments, normally on the same day, or within a day or two. Usually the financial instruments are derivatives, such as futures, options, and CFD’s as they have a higher level of leverage. This high leverage gives the Day-Trader the opportunity to make enough returns in the very short period.

For some people Day-Trading is a hobby and for others they have given up their day job and spend every weekday watching the markets and trading.

The two main age groups of Day-Traders are 25-30 years old with surplus cash and have been brought up in the computer / internet age, where Day-Trading has really taken off. This is because of the ability for the average person to follow the markets in real time on the internet and place trades over the internet with lower brokerage rates. The other group is that of retirees who are looking after their own investments, and usually have more time on their hands to learn the skill and trade.

In the past share investing has usually been more of a longer time frame investment. With investors holding onto share for many years. These days the average length of time that shares or derivatives are held for has dropped considerably.

When holding onto shares for the long term Fundamental Analysis, which involves evaluating a companies financial position, such as profit and P/E ratio, was far more important. For a Day-Trader Fundamental Analysis is less important as it will rarely change a companies share prices during the day unless there is some sort of announcement.

What Day-Traders more commonly use is that of Technical Analysis. Technical Analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical Analysts believe that historical performance of shares and markets are indicators of future performance. Technical analysts do not attempt to measure a security’s intrinsic value, they instead use charts, and other indicators to identify patterns that can suggest future price movements.

Common patterns have been recognized over the years, such as support and resistant levels, candlesticks and break out patterns. Other indicators are such things as momentum, convergence/divergence, Williams %R, Moving averages, overbought and oversold, and Volatility to name just a few.

Most day-Traders have a strategy and a trading plan that uses these indicators to determine when they buy and sell. Using these derivatives the Day-Trader can go long or short, meaning that they can bet whether they think the market will go up or down.

The trading plan should also have predetermined profit targets and stop losses. This is very important in relation to money management.

However, the nature of these strategies can vary significantly in terms of risk, assessment techniques, size and even types of investments traded.

Many online brokers provide real-time trading platforms. This allows the Day-Trader to monitor movements as they happen, personalize your desktop for your trading style and place orders.

In addition to this, many traders use software programs or toolboxes that reflect their trading style. Such programs include MetaStock, BourseData and MarketScan. Some programs are set “black box” programs which just tells you when to buy and sell without explaining the reasoning behind the decision.

Other programs involve a live trading room where Day-Traders see and hear a professionals charts and trading plan and allows them not only to copy what the professional does in real time, but also allows the trader to ask question so they can learn the skill at the same time.

A new program to the market is the Auto-Trader. This allows the Day-Traders account to follow a professional traders account without you having to do anything. This not only solves the problem of the time necessary to trade but also overcomes the emotional problems that can be involved in trading.

Whatever strategy you choose you need to be disciplined in your trading to maximize your returns.

Author: Rob Read
Article Source: EzineArticles.com
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Helpful Tips For Day Trading

May 15, 2010 · Posted in Penny Stocks · Comment 

The term day trading stands for the system of selling and buying financial tools like bonds or stocks throughout the day.

If managed properly and smartly, day trading can prove to be extremely beneficial for making money. But it requires a lot of study and regular updates. Many beginners assume that it is very simple to go for stock trading but it is not so in actuality. Here we shall be discussing few day trading tips that would help new as well as existing traders to earn quick and good returns on their investment.

Never be overconfident and do overtrading. Keep in mind that most of the time, the market is moving in an unpredictable manner. Part-time traders on small trading in the market are not able to assess such unpredictable conditions in an active manner.

Majority of investors opt for day trading due to the excitement of the business and scope for big profits. This is the initial stage for the trader of heading towards failure. A successful day trader is the one who sits and watches the variations in the trade for a long period and waits for the right time to come when he could make high profits with minimal risk. An experienced and smart trader knows that slow and steady wins the race.

The two best times to trade are:

(a) The starting of a new trend
(b) A trend has run its course

These are the only two right times allowing you to move the profits to your side. In case you plan to trade in the middle of a trend, be ready to touch the highest risk level and get inclined to losses.

A huge number of free trading rooms for day trading tips are available nowadays. But, it is better to trust your research and conscience rather than following such trading rooms. History shows that it is not safe on the trading part to trust such day trading rooms.

Never get emotional while trading stocks. Emotions don’t matter in trade. Rather, they turn you towards psychological as well as monetary loss. Don’t get excited on any good news and don’t without prior evaluation of the situation. Go for a thorough research before taking any action just on hearing good trading news. That is, control your emotions and analyze the condition. In case of loss, don’t panic. Just relax and try to find out what and where get wrong. Don’t get too depress on your defeats. Keep your mind open. All this will help you in achieving good profits.

Most of the traders bank on back-testing for their future trading actions. That is, following a technique that has proved to be successful in the past. Such traders take their future steps depending on such specific techniques. But the fact is that though back-testing is a good methodology, it is not necessary that previous performances suggest future results. Many times, a tested and proven trading method doesn’t warranty you a trading success.

With the right drive, dedication and discipline, day trading can greatly influence your monetary future success.

Author: Megha Batra
Article Source: EzineArticles.com
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Day Trading Futures and the Market

May 14, 2010 · Posted in Penny Stocks · Comment 

Day trading futures is the method of buying and selling the future contracts in the same day. Open positions are not kept in control overnight. Often times, trading futures are held for only couple minutes or for the whole session. To be successful as a futures day trader, one must gain good knowledge, discipline, and experience. Each day trading future market has its own specifications that explain market parameters such as the tick size and the symbol. Future trading is the active trading markets, therefore the market price is very high and trading volume is also high. Futures can be day traded without any regulations, and thus makes it very preferable to US markets.

Future markets are available with many underlying instruments and also this trading has good liquidity and price movement. The underlying instruments included are currencies, commodities, and stock indexes. Future trading can be traded in up and down directions. If one expects the market to move upwards, then the trader enters the long trade, where the trader buys a contract and move out of the trade by selling a contract. If one expects to market to move downwards, then the trader enters the short trade, where the trader enters by selling a contract and exit by buying a contract.

The same procedure is followed for multiple contracts, and separate entries and exits are followed for each contract. The only criterion to be followed is that the same number of entries and exits should be followed for the particular trading market. The biggest advantage of this future trading is that this trade moves in both directions which make the traders to get more profit regardless of the direction. Therefore, traders care much about this type of trading not the direction.

The main parts of the future trading system are agricultural products such as wheat, coffee, fruit, cotton, and rice, and commodities such as FX, energy products, and real estate.

Most important future contract specifications are symbol, expiration date, exchange, and tick size and value. The exchange, symbol, and expiration date are combined together to understand the current market and contract. Tick size and value specifies the price, profit, and loss potential. The contract specifications help in configuring charting and trading software to trade the right contract.

Future contracts are valid for particular period of time and when it expires the traders should update the software for the next contract. Mostly future contracts are valid for about three months and expire in the month of March, June, September, and December. There are also some future trades that expire more frequently. The contract specifications for popular future trades are found in the market profiles.

Advantages:
Positions need not to be held overnight, and therefore traders can feel relief from any open position worries. From short period of time, one can learn a lot about the future markets.

Disadvantages:
Patience and discipline is very important to do successful day trading futures. Commissions become very large when making multiple trades in the same day. One has to be fully prepared for day trading futures, otherwise the losses can become too large.

Author: John Espinosa
Article Source: EzineArticles.com
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Day Trading, Buying and Selling Strategies

May 12, 2010 · Posted in Penny Stocks · Comment 

The term ‘day trading’ is used to define the act of buying and then selling a stock in the same day. A day trader tries to make a profit by taking advantage of small price changes in the market through leveraging a large amount of capital. There are a few common day trading strategies, and these have been listed below:

There are certain stocks that are great for day trading systems, and a trader may choose them depending on their price and availability. A trader will look for two qualities when daily trading a stock and those are its volatility and its liquidity. The volatility of a stock is its estimated price range for that day; this is the price range in which the trader will then operate. The more volatility a stock has the great the profit may be, and the greater the loss may be. The Liquidity is what allows you to exit and enter the stock at a quality price.

One example day trader strategy favorite is Sun Microsystems. The reason why many day traders buy this stock is because it is very cheap to purchase and very liquid and volatile. Other stocks like this are very convenient for day traders.

One of the most popular trading strategies is called Scalping. This practice sells the stock immediate after profit can be made from selling it. This type of trading tends to move very fast, with the traders watching the moment the stock becomes profitable so they can sell it.

Daily Pivots is a strategy that allows profits from the volatility of the stock. This is accomplished by buying stocks during the low time of the day and when the high time of the day comes, the stocks are then sold. When traders short stocks after they have had a rapid upward move, the process is called Fading. This strategy uses the assumption that the stocks have been over bought, and earlier buyers are already making profits from and selling they’re stocks. In addition, they also try to scare out any existing or potential share buyers. This strategy is very risk, but if all goes well it can generate a huge profit.

The Momentum strategy utilizes strong trend moves or trading on news releases. The day trader will buy when there has been news releases and then continue on with they’re trend until there are signs of reversal.

Generally, daily trading requires the same tools that are used when trading normally. Buying shares is quite the same as normal trading, but the exits are very different. Most of the time, you will want to exit when interest of the stock has decreased. With day trading, investors are more vulnerable to quick price raises and drops, much more so than normal trading. Trading can be a very difficult thing to master, and there are many who try it and fail. But if you create one or more good day trading strategies, with practice and persistence you can stand to make a great amount of profit.

Author: John Espinosa
Article Source: EzineArticles.com
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