Day Trading vs Investing

ETFDailyNews just described lots of issues in the markets lately.“Falling interest rates around the world have fueled the gold rally. Meanwhile, other looming problems are also creating fear and uncertainty in markets that are causing a herd of buyers to go for the gold these days. The trade and currency war between the US and China is a leading issue weighing on the global economy. The deadline for a hard Brexit is on October 31, and Prime Minister Boris Johnson has pledged that he will take the UK out of the EU with or without an agreement. Europe also faces a potential problem in Italy over the coming weeks.

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In the Middle East, hostilities between Iran and the US are possible. In Asia, Hong Kong is the most significant domestic political problem for China since the protests in Tiananmen Square. At the same time, North Korea has been test-firing missiles again in response to US-South Korean military exercises. The global political and economic landscapes have created the almost perfect bullish storm for gold that pushed the price of the yellow metal above $1500 per ounce.

While gold appears headed for higher highs, we must remember that the risk is rising with the price of the precious metal. Even the strongest bull markets experience pullbacks, and since gold took off from $1377.50, the price has not retested that level.” Read more…

Traders can take advantage of these opportunities by day trading or investing. Regardless of the style, the fundamentals of day trading and investing are the same.

Each trade is an independent event. The market does not remember if you lost or made dollars the last time you traded. Everything you need to get started in day trading is usually available online. A Day Trader attempts to produce a profit within a single trading day.

Those who do day trading usually buy and sell securities during the same market day. To be a day trader takes patience, education, determination, and discipline. In order to successfully day trade you must have access to real-time market data.

You need to master the psychology of day trading. In order to day trade successfully, you must develop a trading plan and consistently stick to it. A day trader will rarely hold a stock overnight as there are many other opportunities and a stock that takes hours to move is not worth holding.

A day trader should treat their as 100% risk capital and should not have to unduly worry that the whole amount of this capital may be lost very quickly. Remember that you can make a fortune day trading being right only 30% of the time, as long as you cut the losses on your 70% losers so that the profits on your 30% winners outweighs them. Virtually every trader has dabbled with or experimented with some sort of moving average.

Don’t begin your day trading with money that you can not afford to lose. Day traders should understand how margin works, how much time they’ll have to meet a margin call, and the potential for getting in over their heads. Day trading is not a get rich quick business. Day traders use only risk capital, which they can afford to lose.