In this article I want you become more familiar with Day Trading thoughts.
At first, what is Day Trading? "Day trading" means that a trader tries to
make money buying and selling stocks during the day taking advantage of
the daily price movement. Day traders end the day flat (with no open
positions).
It is commonly stated that 80-90% of day traders lose money.
Also price movements in a day are few, so why people trade only in a day?
What are advantages of being a day trader?
Advantages of Day Trading
Less Stress (Zero Overnight Risk)
To avoid the risk of price gaps (differences between the previous day's
close and the next day's open price) day traders close all their positions
at the end of a trading day. Because of this, day trading is less
stressful than holding stocks overnight. After market closed you are not
worried what will happen until tomorrow and what news will distribute. You
never 'lost sleep'; in the morning have a nice feeling because you don't
care what the market's doing at the open.
Cheaper Commission
One thing that makes day trading potentially profitable is commission
structure. Day traders pay 'per share' instead of 'per trade' structure .
If you pay about $10 per trade now when you become a day trader, you may
pay about $0.01 per share.
Increased Leverage
Day traders could have 4 times their equity as intraday buying power.
This great margin can increase your profits if used wisely. This increased
leverage makes day trading very risky, especially if one has poor
discipline, risk or money management.
Profit in any market direction
Day trading often will utilize short-selling to take advantage of
declining stock prices. The ability to lock in profits even as markets
fall throughout the trading day is extremely useful during bear market
conditions
Learn More about Day Trading
