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Day Trading 101
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Trading, business and the financial market is a big, complex world. There’s foreign exchange, currency trading, and even day trading. And perhaps, it is day trading that needs more than just a simple mention in the book, for one, foreign exchange and currency trading are relatively easy to understand, day trading is a whole new concept.
Simply put, day trading is the buying and selling of financial investments and securities within the same trading day. These financial investments and securities would include stocks, stock options, currencies, and contracts like equity index futures and commodity futures. As opposed to swing trading where the stocks are held for a couple more days, the stocks in day trading are held only for the duration of the trading day.
Day traders buy and sell securities during the day, and do not hold stocks overnight. Anyone interested in day trading must have enough capital for him/her to be able to buy at least 1000 shares of a particular stock on a particular day. A neophyte in this venture would do well to save around $25,000 for him to be able to play in the market. Furthermore, this should be treated as a 100 percent risk capital.
Day traders should know how to cut their losses short. They should know to trade along with the trend, go with the flow, and never to get emotionally attached to their trades. It is advised to trade high volume, popular stocks as they are easier to sell at the end of the trading day.
Day Trading Currencies
As day trading requires a capital of at least &25,000, many might ask what a trader could do with a capital less than $25,000. The solution: trade currencies. A player could day trade currencies with as little as a couple of hundred dollars. All you need to do is open a FOREX mini account.
One of the perks of day trading currencies is that the FOREX market is open 24 hours a day. You can day trade even at night, anytime of the day, any day of the week. There’s no ‘uptick rule’ which makes selling of currencies as easy as buying them. The player can day trade his capital, providing him with chances to cut back on possible losses. The player also has greater leverage. Normally, day traders have an intraday margin of 4 to 1, allowing them to trade $100,000 worth of stock with their $25,000. But day trading currencies or short-term trading has a 50 to 1 margin, which allows the player to trade $1,250,000 with $25,000 or less.
What’s more, the trader has the option of deciding the amount of leverage to use depending on his day trading strategy, his available capital and the risks he’s willing to take. It’s also more liquid because the currencies are always in action. As there are only few currencies to monitor as compared to stocks, currency day trading is easier to follow currencies than stocks.
A risky business, one can earn as much as $50,000 in day trading for someone with a keen business sense. As the market is prone to fluctuations, the day trader must be always alert as to when to decide to sell the stock or hold for the right time. In a snap of the fingers, everything could be lost, or you could also have earned your first million. This isn’t a game of luck. Research, study the market, learn the strategies and remember to make wise decisions.
Currency Options Trading News
RBI sets limit on banks' currency futures, options trading positions
MUMBAI (Reuters) - Net overnight rupee open position limit for Indian banks shall not include positions taken in the currency futures and options segment, the Reserve Bank of India said on Monday. Positions ...
Read more...RBI initiates measures to prop up Rupee
Mumbai, May 22 : In yet another measure aimed at propping up the depreciatng Rupee, the Reserve Bank of India has excluded banks' net overnight open positions limit from currency futures and options segment.
Read more...Asia Currency Options Least Bearish in Year on Yuan Risk
Options traders are the least bearish on Asian currencies versus the dollar in a year as confidence builds that China will avoid a so-called hard landing, helping lure funds as Europe’s debt crisis deepens.
Read more...Steps taken by India to support rupee
REUTERS - The Reserve Bank of India (RBI) announced further measures on Monday to curb speculative trading in the foreign exchange market, but the move failed to halt the rupee's slide to another record low. The administrative measures, in addition to directly selling dollars by the central bank in the market, are seen as inadequate to defend the rupee that is pressured by dwindling capital ...
Read more...Rupee up 4 paise versus dollar
The Indian rupee recovered by four paise to 54.99 after touching all-time low of 55.07 against the American currency in the late morning trade due to mild selling of dollars by banks following following measures taken by RBI to curb the local currency's fall.
Read more...ThinkForexâ„¢ Offers Traders Free Live Forex Trading Accounts
AUCKLAND, New Zealand, May 10, 2012 /PRNewswire/ --Â ThinkForexâ„¢ is now offering free live forex accounts to all forex traders! Open your ThinkForex forex trading account immediately for immediate access ...
Read more...From Aussie dollar to ANZAC dollar?
The growing view that the euro is a failed experiment hasn't stopped pundits considering a shared currency between Australia and New Zealand. But it seems unlikely politicans would have the will to test it. 22 May 2012 6:09 AM
Read more...Rupee sinks below 55
The Nifty ended the day 0.3 per cent, or 14.60 points, higher at 4906.05 points.
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