Day trading refers to the buying and selling of financial instruments like currencies, stocks or futures contracts, on the same trading day. This type of stock investment involves a lot of risk. Day traders carry out day trading by purchasing and selling stocks rapidly on the same day. Securing quick profits through day trading is based on the hope that the value of the stocks will continue to rise or fall in the short period when the stocks are held, before being sold. Some feel the traditional rule of settling the trade before the market closes, may go against the market wisdom of letting the profit run. However, this helps the day traders in avoiding the risk of price gaps. The price gap refers to the difference in price between the last close and the opening the next day.
Profit-making through day trading online:
Day trading can be very profitable due to the rapid returns. Traders willing to take high risks generate huge returns with day trading. Earning huge profits takes a couple of minutes or hours. The advancement in technology and electronic communication, especially the Internet, has contributed a lot to its popularity in recent years. Initially, day trading was limited to professional traders of financial firms. It used to be a marginal form of trading stocks for the elite group of private investors. Today, even casual traders indulge in day trading to make a profit. The popularity of the Internet has triggered off the swift flow of information, at a click of the mouse, making day trading all the easier to execute.
Online day trading strategies for quick profit:
These are five-day trading strategies that every trader should keep in mind:
Follow the trend: Usually, day traders assume that the steady rise in financial instruments will continue to do so and vice versa, in the case of a decline. All trading time frames use trend following. Trend followers purchase a rising financial instrument, or they sell the falling ones, short. This is done with the assumption that the trend will continue.
Despite the profit-making strategies and popularity, day trading is not easy. It involves huge risk factors and according to statistics, 80-90% of day traders lose money in day trading and only 20% gain. It is an expensive and stressful, full-time job, but if you are disciplined, a quick decision-maker and can maintain good risk and money management, then you have strong chances of earning profit by day trading online.