- Date : 21/03/2022
- Read: 3 mins
Day trading is a form of dealing in shares in a single day where people can make money because of small fluctuations in the price.
Day trading is dealing in shares in a single day where people can make money because of minor fluctuations in share price. It is purely based on support and resistance and not bluff indicators or data. It involves making short-term trades to make a profit in the financial markets. A successful day trader must know which stock to trade in, when to enter into a trade and when to exit it. The most common day trading markets are Stocks, Foreign exchange, or Forex and Futures.
How Day Trading Works?
Day trading mainly works on volatility. They rely primarily on stocks or market fluctuations to earn profits. Day traders like the stocks that bounce around or fluctuate a lot throughout the day. They also prefer liquid stocks that allow them to move in and out of a position without affecting the price. They might trade the same stock many times in a day. The central concept is to buy the stock if it moves higher or short sell it if it moves lower. Whatever strategy they use, they are looking for the stock that moves.
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Points to consider while picking the broker
1.Speed of execution:
Speed of execution is an essential factor due to the high number of trades happening in a day.
The lower the fees and the commission rates, the more will be the profits, and some brokers will reduce the commission the more you trade.
Make sure the broker you choose is a regulator. They will be legally obligated to protect your financial interest.
Whichever day trading strategy you use, you may need some assistance at some point, so you need to choose a broker with quick response and strong customer support.
5.Is Day Trading Illegal:
Day trading is neither illegal nor unethical, but it can prove risky because day traders can lose more than they have invested and end up in massive debt.
Nothing works in trading all the time simply because trading is a probability. It is not an exact science, so change your mindset and develop a probability mindset. But it would help if you had the proper technique, which works most of the time.
One thing which works most of the time is pure support and resistance. It works because trading is all about buyers and sellers. Whenever buyers outnumber sellers, the market is likely to bounce. When sellers outnumber buyers, the market is likely to collapse. One needs to devote most of his time to gain significant gains. You should not consider this if you only have limited time to spare. It would help to track the market and spot opportunities during trading hours.
As a beginner, you need to focus on one to two stocks during a session with only a few stocks to concentrate on. Then, trading and finding opportunities become easier.
This article is intended for general information purposes only and should not be construed as insurance or investment or tax or legal advice. You s