What exactly do you think the "other" day traders do wrong?
If they are "ignorant" as you suggest – what should they know that would make them less unsuccessful?
If this is more than idle boasting – you should take your results in the real world to a publisher and get a book out that allows the ignorant masses to understand your superior techniques and live off the royalties!
What kind of stocks are the ones they are selling right after they get them etc….and rushing around more ?
The other long term strategy is to buy good companies that keep making money every year and wait many years as their shares grow with the earnings. This is the usual way normal people invest their money for the long term. In the short term trying to catch moves is exceedingly difficult for non-professionals.
I am a day trader and often try to derive profit from the disparity in currency rates at various points of time. People who try to make some huge profit can incurr loss using this techniques but if we try to capture small pips then its a winning strategy.
One of the fund Manager of FINEXO suggested me to try this once when i was looking up for high returns. Surprisingly i made huge pips in just 1 hour and thats how i became a Day trader.
Anyways the basic requirements for successful Day trading are:
1. Excellent Command on Technical charts.
2. Look beyond what common man does.
3. Foresightedness
4. Be Different.
5. Good Source of market news and technical charts
6. Ability to draw conclusions from market updates.
If you have these you can very easily succeed here. I am using Finexo charts and updates which are quite accurate and reliable for me. If you have other sources it would be an added advantage.
Take 6 months to a year reading, learning and paper trading.
You fully understand the fundemental and technical aspects &(just as important) use very exact money management techniques.
Ignoring the above will put you with the 95% of people that blow their FX accounts (usually very very very quickly).
Consider yourself warned!
This is a great market for those that take the time and make the effort. All others lose big.
If you list at least two of the books im reading this month i'll give you the "Best Answer"
So what are you guys reading?
2. The Stock Trader: How I Make a Living Trading Stocks by Tony Oz
3. The Nasdaq Trader's Toolkit by M. Rogan LaBier
4. The Master Swing Trader: Tools and Techniques to Profit from Outstanding Short-Term Trading Opportunities by Alan S. Farley
5. Tools and Tactics for the Master DayTrader: Battle-Tested Techniques for Day, Swing, and Position Traders by Oliver Velez
6. The Undergroundtrader.com Guide to Electronic Trading: Day Trading Techniques of a Master Guerrilla Trader by Jea Yu
7. Day Trading on the Edge: a Look-Before-You-Leap Guide to Extreme Investing by Leslie N. Masonson
8. The Guts and Glory of Day Trading: True Stories of Day Traders Who Made (or Lost) $1,000,000 by Mark Ingebretsen
It requires a lot of time in front of the computer.
Basically if you want ot day trade – in and out of a trade on the same day – well you have to be dependent on technicals as well as any news that the market is awaiting or is absorbing. and for private investors this up to date news is hard to obtain.
Technical charting day charts – make sure you have all the indicators in your system present as well as all the time scales that only cover the day: ticks. 1 minute, 2 minute, 5 minute, 1/2 hour, 1 hour.
Not all indicators work in this short term environment.
Look at Cramer's record – it is worse than DOW's — so why should I listen to his recommendations
About day/swing trading — start with small amount (say $3000) learn on your own, read and practice, do not quit the job.
Do not listen to others. (including me!)
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.
If only there was some magic way to always earn money in the stock market.
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.