I am a beginner to the stock market I have been reading and studying trading on the stock market. So far I have taken no action to trading on the market I am still in the learning mode and feel I am not ready to dive into it yet. I have a few questions I want to know if day traiding is a good idea I want to stick with cash trading my goal is to make a quick turnaround. I am planning to puchase software will the software indicate to me which stock to purchase to make a quick turnaround on? Or will I have to do some research before making that decision? Also, How many stocks will I need to purchase in a day and what price range per stock will I be looking at in day trading?
Day trading is NOT for beginners
you need to have enough knowledge of how to proceed in day trade so you don't get burned.
i'd suggest you learn all the foundamentals of stock market before you throwing money into stock market.
learn what cause stock price change and how market conditions and news affect stocks in each sector.
i'd highly recommend you get Jim Cramer's Mad Money AUDIO book so you can listen to the CD while driving it's very helpful for beginners.
and watch CNBC Fast Money to get every major market event and news to stay on top of the game.
also.. at least learn stock evaluation techniques and calculate net present value of underlying stock.
Ok im usally inside the box and follow ben graham and phil fishers techniques but i have found in the past 2 years that this has been working highly speculative low cap stocks look for ones that gone up 10 – 15% before lunch on a trading day read the chart figure out a good enter point ride it up 1% in one day do this atleast 200 days and in five years with an initial investment of 10000 you a millionaire in 6 your a billionaire
Momentum trading has already caused some of the world's largest hedge funds to close. They lost so much money that they couldn't pay back their investors.
If only there was some magic way to always earn money in the stock market.
If only there was some magic way to always earn money in the stock market.
The act of buying and selling stocks in a single day (day trading) requires large amounts of leverage from the buyer to take advantage of small fluctuations in the price of stocks or indexes. Leverage means money, and this may be obtained through credit (loans) or, if you are lucky, a financial institution. For the average investor day trading represents too great a risk, and yet for those willing to take the gamble, the rewards can be considerable.
A day trader traditionally examines a stock for two qualities: Liquidity and volatility. Liquidity means that you can enter and exit a stock at a good price (i.e. when you look at its price it is low, but you expect it to make gains throughout the day). And volatility refers to the price range that the stock is expected to achieve. A day trader will look for stocks he/she believes will make gains in the space of just a day.
Once the stock has been identified the trader requires an entry point, or the best time to buy. There are many different methods for ascertaining this point, but here are a couple of suggestions:
1. A spike in volume can mean that other investors are purchasing the share at its current price, meaning they are confirming that it is currently at a good price.
2. Previous days highs and lows can also demonstrate the best time to purchase the shares.
Investor also have a number of methods for knowing when to sell their stocks to maximize profit and reduce the risks. Scalping is the most popular method, where shares are sold almost immediately upon making a profit. Profits are not always huge, but risk is minimal. Daily pivots is another very popular method and involves judging when the high of the day (HOD) has been reached and selling at that point. Other strategies are to sell shares as they reach a high, and then as they drop back down buy more with the expectation that they will be bought again and the gain in volume will increase the price (this is known as fading).
To minimize risk day traders nearly always employ a stop-loss limit. This limit is placed at the maximum amount you are willing to lose and sells your shares at that point, and doesn't allow you to go further. This can done as either a mental limit, or one you programme into your system.
The reality of day trading is that around 80% of traders lose money, with few making profits in their first few years (see: www.investopaedia.com). And over half of those that attempt it will fail. But with some of the techniques described above and a commitment to evaluating your performance and limiting losses profits can be achieved, and for a few they can be exceptionally large.
A day trader traditionally examines a stock for two qualities: Liquidity and volatility. Liquidity means that you can enter and exit a stock at a good price (i.e. when you look at its price it is low, but you expect it to make gains throughout the day). And volatility refers to the price range that the stock is expected to achieve. A day trader will look for stocks he/she believes will make gains in the space of just a day.
Once the stock has been identified the trader requires an entry point, or the best time to buy. There are many different methods for ascertaining this point, but here are a couple of suggestions:
1. A spike in volume can mean that other investors are purchasing the share at its current price, meaning they are confirming that it is currently at a good price.
2. Previous days highs and lows can also demonstrate the best time to purchase the shares.
Investor also have a number of methods for knowing when to sell their stocks to maximize profit and reduce the risks. Scalping is the most popular method, where shares are sold almost immediately upon making a profit. Profits are not always huge, but risk is minimal. Daily pivots is another very popular method and involves judging when the high of the day (HOD) has been reached and selling at that point. Other strategies are to sell shares as they reach a high, and then as they drop back down buy more with the expectation that they will be bought again and the gain in volume will increase the price (this is known as fading).
To minimize risk day traders nearly always employ a stop-loss limit. This limit is placed at the maximum amount you are willing to lose and sells your shares at that point, and doesn't allow you to go further. This can done as either a mental limit, or one you programme into your system.
The reality of day trading is that around 80% of traders lose money, with few making profits in their first few years (see: www.investopaedia.com). And over half of those that attempt it will fail. But with some of the techniques described above and a commitment to evaluating your performance and limiting losses profits can be achieved, and for a few they can be exceptionally large.