What is Day Trading?
Day trading is a high-risk/high-return investing strategy. Day trading the equities market has been a popular trading strategy since exchanges like the NASDAQ and London Stock Exchanges launched electronic systems allowing broker/dealers to immediately execute small deals. Day traders link to the market, via brokerage firms or CFD providers, in real time, through electronic communication systems.
How is day trading different from traditional securities and stock trading?
With the advent of the Internet, a new breed of traders has formed. Financial mavericks known as day traders are now a force in the market. Daytraders buy and sell with the intent of making a quick profit in a few hours’ time. Therefore, speedy order execution and low commissions are absolutely crucial to them.
As such day trading is a very short-term investment strategy – trades may last a few seconds or an entire day. The goal is to increase daily profits in stocks, as compared to longer-term growth investments like bonds, notes, or long term stock holds that may be redeemed at a future date. Day traders jump in and out of the market, and closely follow how their positions in their stocks during the day. As a result of this type of trading commissions can add up.
How high are the risks of Day Trading?
The risks and rewards can be high. Day traders are competing against other day traders, market makers, and institutional traders who are seeking the same potential rewards from their trading activities. Money management, discipline, and talent are traits you will want to develop in day trading.
Can I start part time from my home or office?
Yes, This is highly recommended before committing full time to day trading.
How much capital is needed to be a Day Trader?
To day trade the equity markets full time, we would suggest an initial capital investment of $50,000 of available risk capital. There are many traders who have started with less and there are some trades who utilise leverage to amplify market movements. Regardless of available risk capital, we recommend that new day traders start slowly and have a well defined trading strategy and plan before they begin.
What is the future of Electronic Trading?
We believe the future is bright. Stock markets all around the world are moving toward electronic trading. Customers demand it! Electronic trading allows you to be right there and reduce the chance of someone mishandling your order. Someday, most markets will be electronic and provide fair and equal access to all participants.