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.
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.
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
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