Online Trading - What Type Of Investor Are You?

There are different types of investors who take control of their own destiny and trade stocks online. These types can be defined across many variables including their investing goals and their investment time frame.

Where you fall within these two categories will determine which type of investor you are. And which type of investor you are determine the investing strategies you use as well as the tools that will help you the most. Here is one way to define the categories:

Investing Time frame: Long-Term (1-30 Years)

Investing Goal: Earn returns superior to savings accounts, CD's, money market funds, etc.

Think of this investor type as the traditional investor. Their goal is to continually add money to their principal over time and invest it a low-risk way. This is the strategy someone would use to build up their retirement account. Their investment choices would be made up of blue-chip stocks, other NYSE stocks and mutual funds. If they make 15% per year, they are happy because over a period of years, this rather small profit will build on itself and create a multiple of the initial principal.

Investing Time frame: Intermediate-Term (Days to Weeks)

Investing Goal: Earn a meaningful profit to supplement current income streams

Think of this investor type as the part-time trader who trades stocks as a way to generate a second income stream. With all the online tools available, an average person can work with a very small initial fund (think $500 as an example) and conduct their own research and place their own trades with the hope of doubling that over weeks or months. If you can do it once, you can do it again and pretty soon you have made a significant gain. This investor will trade in penny stocks or other small cap issues and options because they have the potential for large percentage gains in a short period of time.

Investing Time frame: Short-Term (Minutes to Hours)

Investing Goal: Earn a Consistent Profit to Serve as a Primary Income Source

This investor type is the day-trader. Their goal is to trade full-time and generate enough income to pay the bills, replacing their regular job. This is very risky for lots of different reasons and is not for the casual investor. The folks who can make it here are pros and very sophisticated in their ability to spot trends, act on them quickly and get out fast. They will trade all variations of stocks as well as more advanced vehicles.

If you are an Intermediate-term trader, there are many resources available on the Internet that can give you a fast and easy way to get good stock information. Finding the right sources will save you lots of time and, more importantly, help you generate significant profits. So just what is "significant profits"? That is up to you and your investing style and depends on how much money you have to invest, how much time you will spend finding good stocks and how much time you will devote to placing trades and tracking their progress.

Tips To Help You Make More Money From Your Trading

The following tips can be used to help increase the profitability of your trading.

#Make money when stocks falling price

One of the best kept secrets of professional traders is the short trade. This type trade allows you to make money when a stock falls in value. Traditional trading means buying a stock and hoping the price rises to enable you to make a profit. Short selling is the process whereby you sell a stock that you do not own. This is done by borrowing the stock from a broker, enabling you to give the stock to the person to whom you have sold. Then when the price falls, you simply buy the stock in the market (at a price lower than you sold it)and deliver the same amount of stock back to your broker that you borrowed. The profit you make is the difference in price between when you sold and bought the stock multiplied by the quantity.

Having the ability to short sell enables you to make money not only when prices rise, but also when rices are falling.

# Automate your trading

Many professional traders have automated trading systems that assist their trading decisions. Once a suitable strategy or stock picking formula is created by professional traders, they often convert it in to a computer program that allows them to automate their trading in the future. The main benefit of this is that it enables them to spend much less time on research and focus their attention on profitable trading.

# Take small profits

Many traders make the mistake of trying to wait for their trades to make massive profits before selling. Instead you can often be much more successful trading more regularly making a small profit each time. Again this tends to be how the professionals trade.

The Biggest Risk When Making Money With CFDs

Contracts For Difference or CFDs, as they are known, have allowed many small investors to participate in the the markets at levels previously reserved for the bigger players. However, CFD providers are not brokers and this presents a problem that does not exist on the open market.

CFD providers can be compared with bookmakers who bet on the probabilities of a horse winning or losing or coming the place, or being placed in some other combination as the first or second place-getters or first three or four place-getters, or even first two or three or four place-getters in exact order that they finish. Unlike CFD providers, around the world, bookmakers are becoming a dying breed and pari-mutuel betting on a totalizator pool is more common, and in a way acts like an open market, where no one is pitted against a particular operator who sets a market and becomes a market maker.

Actually, CFD providers are like the bucket shops that used to operate in the early days of the stockmarket, where the operators would run a virtual market that approximated the stockmarket. The idea was a market would be created simulating the real market, and the operators would work on punters trading with them, and they would lay the money on the real market or back their judgment and take on the punter who would trade against them.

Jesse Livermore, the renown trader of yesteryear, learned how to trade the markets in the bucket shops, and was one of the few people to make a living from them, even though the odds to do so were greater than playing the open market.

If you can make money against a bucket shop CFD provider, you will certainly be able to do so on the open market. The difference between the CFD provider and using a broker on the open market, of course, is you can leverage your money with minimal cost using CFDs. There is no having to set up a line of credit with a banker or a financier, you just simply apply via an application form and once your account is set up, you are off and trading. All you need is the minimum amount that is required to open an account. In many instances, this is as low as one thousand dollars.

The biggest risk faced by people buying CFDs is if the market falls unexpectedly. This can happen when disasters occur, like planes being flown into the New York Twin Towers, or the London Bombings, or any other terrorist activity. This can also happen if their is some unexpected bad financial news like a major company going bust or a run on a bank or unexpected high unemployment figures or news of war. Any news that is construed as having the possibility of being disastrous will see the stock market fall very fast, and if you happen to have CFDs, there is a strong probability that your account could be wiped out.

There are two reasons why you could be wiped out. One is you are not keeping an eye on your investments when the event occurs. The second reason is you are keeping an eye on your investments but the CFD provider will not buy back your CFD before it is too late. On the open market you may not lose as much, but this does not mean you should not trade CFDs. This just means you must be wary of this possible disastrous financial pitfall.

Sure-Fire Futures Trader Money Loser - Negative Personality Traits

There are certain psychological characteristics that can negatively impact your ability to succeed as a futures trader. Learn to recognize these behaviors in yourself and guard against them.

THE CHEAPSKATE TRADER

Many people are foolishly cheap. They are so anxious to start trading on the futures markets that they ignore the necessity of first acquiring the proper education, tools and software to succeed. These people will lose more money in their first round of trades than they would have spent on the tools that would have allowed them to succeed. You can't be "penny wise but pound foolish," as my grandmother would say. Don't nickel and dime your training budget. If you truly want to succeed as a futures trader, spend the money to learn from the best and acquire the best tools available.

THE IMPATIENT TRADER

We lived in a society increasingly driven by instant gratification. We don't want to wait for it or earn it; we want it now! Futures trading is a fast-paced, risk-filled environment that seems to attract people who like to live in the fast lane. These people are so blinded by the dream of instant wealth that they neglect their training, fail to take the time to develop a reliable system, refuse to stick with their system and, as a result, crash and burn. As grandmother would say, "You have to crawl before you walk and walk before you run." If you want to succeed as a futures trader, slow down and take the time to learn the ropes and develop and practice your system.

THE GREEDY TRADER

Futures trading is not the way to get rich quick, though some seminar organizers use that as a marketing ploy to lure the unwary. Successful futures traders are not gamblers. You cannot succeed by trading out of greed or desperation; or as my grandmother would say, "A fool and his money are soon parted." Using emotion as a basis for trading is a quick path to failure. Successful futures traders learn all they can, develop their system, work it and stick to it. Success as a futures trader comes from accumulated profits over time (often small at first), not one big score.

THE OVERCONFIDENT TRADER

If you want to succeed as a futures trader, park your ego at the door. Ego distorts rational thinking. The overconfident trader allows emotion to rule his actions. He is so certain that he is right that he will overstay a position to avoid admitting he was wrong. The market is fluid, ever changing. A futures trader must also be fluid and be able to change position in order to succeed. You will never be smarter than the market; the market will always win. As grandmother would say, "Pride goeth before the fall," to which granddad would add, "Don't bump your nose on the way down."

We all have at least some of these traits; however, futures traders must be vigilant that quirks of personality do not become liabilities on the road to success.

Selecting The Right Stock Trading System Is Crucial For Success

Stock Trading Systems can be the key to your success as a trader but only if...

As we all know trading stocks is not easy or guaranteed. Heck if it was we would all be making tons of money. However there are definitely systems in place now that allow the average person to produce extraordinary results both short and long term. Gone are the days when throwing darts at a wall have an equal chance of success.

The real key is to find a system that fits your needs and then use it religiously. Keep in mind that a system is some organized or established procedure for doing anything including trading stocks. The two keys for your success are organized and established. A system allows you to formulate a plan based on your goals. Without a plan you might as well go back to the dartboard. People who fail often times fail to plan.

One of the biggest obstacles to success when trading stocks is based on the decision of when to buy and sell. A good system takes the guesswork out of the buying and selling and allows you the peace of mind knowing that all you need to do is follow the recommendations from the system. It really is easy. If you are trading stocks its all about the bottom line. You'll quickly loose interest not to mention your money if the system doesn't produce a profitable outcome consistently.

There are really only two types of systems: They are Fundamental and Technical. Both have merits but you will need to determine, based on your goals, which best suits your mindset. With a fundamental approach economic data is the backbone of the analysis and with technical it's all about the stocks history.

The variables that go into a system can be rather simple with some systems and extremely complex with other systems. Depending on your amount of involvement you will need to select a system that provides you with short, quick and accurate information that you can easily read and then act upon if so desired.

My 5 guidelines for selecting a trading system would be:

Easy to understand


Quick to read and apply


Requires just a few minutes a day to execute


Has a reasonable price based on the service provided


Most Important; What is the long term track record

So if you're looking to get into the stock trading game and don't have the time to do all the research yourself come by and check out the Alpha Equities System.

Day Trading Program Optimizes Trading Strategy For Eminis, Forex Markets

When you're day trading, you have to have a system with rules that define which stocks you watch, and when you buy or sell. Whether you are investing long-term or making a short-term power play, it is vital that you have a sound strategy and stick with your own strategy. To do this effectively, you need to be mentally tough and remove your emotions from the equation.

There are many software programs that help day traders manage their investments, however, many of these systems are designed to work as trading "guides" and they do not account for trends and real time updates.

As a day trader, you must have the ability to take a loss. Although you can't always win and make a profit, being able to minimize the risk and potential for loss is key. The ability to exit a poor position with as little damage as possible is almost as valuable as the ability to always make the right trades. No trader makes money all of the time.

Most day traders have witnessed other traders lose thousands in cash after buying a stock and watching it hit the dumps. While they talley their losses, they wonder why the stock had such "good news." Good news doesn't always equal a payout, and bad news isn't always bad financially. With these concapets in mind, it is critical to maintain a steady and systematic approach t day trading.

With a proven

Share Trading Basics

As with any profession, you must first learn the fundamentals; here we learn some share trading basics. Most people start trading the Australian sharemarket with $2000 but you can start for as little as $500 plus brokerage costs. But before looking into the basics of trading shares you should ask yourself the following questions: What do you want to achieve from your share trading? What level of return do you expect? Do you think this level of return is realistic? Are you prepared to strictly follow rules and systems in your share trading? How much money are you prepared to risk in your share trading activities? Answer these questions as truthfully as you can.

An important basic share trading principle is the amount of time you are willing to spend in the market. Also consider the other influencing factors such as opportunity cost and other interest repayment costs. Also keep in mind that this length of time will vary greatly from person to person and there is no one correct answer. The best length of time to choose will fit your trading personality. Most of the time trading stocks involves a short time frame but there are trading systems which involve a longer time period. (Such traders who trade longer time frames may have a multitude of reasons why they have longer time frames: some may find it more comfortable or others may trade longer time frames to minimise their analysis time) Be mindful that you don't transform your trading into an investment portfolio where you have let a trade turn sour and you have not followed your planned exit from your trading plan.

Your share trading activities may attract tax implications. If your market trading activities match certain criteria set out by the taxation department, your professional share trading could be seen as a type of "business". Please seek professional advise from your accountant about tax implications and your share trading.

Keep liquidity in mind when you are trading. You will definitely want liquidity when you trade so you can easily enter and exit trades as you please, as close to your bid or asking price. Most stocks on the sharemarket are liquid, but many are also illiquid. Most liquid stocks are usually in the top 10, 100 or 200 companies of the stockmarket (in order of market capitalisation) and in Australia, these companies would be listed on the ASX100 and ASX200 indices.

Finally, you must accept the fact that you and you alone are responsible for your financial future and your share trading. You control the amount of risk in a trade and any losses must be accounted for as well as have a trading plan strictly followed. The share market doesn't dictate how much YOU lose, only you decide how much money you are prepared to lose by presetting your stop loss and the amount of risk you are willing to place in every trade you execute. The stop loss level must be determined and set in stone before any trade is initiated. Many formulas and theorems exist for differing trading needs, but most traders use a simple rule called the 2 percent rule.

Building Superb Trading Habits

The world of financial trading can be an unpredictable one. Even the finest and most knowledgeable traders in the market have a awful trading session every so often. The reality that traders are human means that mistakes will happen. Nonetheless, there's always room for improvement and constructing first-rate trading habits could go a long way to increase trading profits. Here are a few basic principles that mold the building blocks of sound trading habits:

Stick with your techniques. Proficient traders have a pre-defined trading plan and many very specific trading principles. As the market turns on you, do not scrap your trading plan. That will only help to keep you away from the action. The sole formula to make money is if you continue trading and using the methods that have consistently worked for you.

Find your niche. Nearly all winning traders specialize in specific types of trades. And many successful traders also stay with what they know best. Whenever you take too many positions that are out of your trading expertise, you're extremely likely to fail. When you discover your trading niche, stick to it and you'll go more effective at what you do. If you do better at high volume trades, then you should only trade during a time period where there is high volume.

Define your risk limits. Each time you execute a trade, remember to specify precisely how much you are able to lose and how much you would be content winning. Then let the stock market guide you along the way. Sound technical analysis should be able to tell you what the optimum selling price (near resistance) is and what the best buying price (near support) is. Make certain you set your limit orders around these prices.

Define yourself. You need to be clear on what type of trader you want to be. Are you a swing trader or a day trader? It's very difficult to be successful if you try to do both. If you're a swing trader, then you have to avoid watching the minute to minute movements and all the small-scale ups and downs. You can't allow such short-term to fluctuations influence your trading if you're in it for the long run.

Patience. Once you're confronted with non-ideal market conditions, you must have the power to resist the urge to do something that is driven by impatience. This includes stopping yourself from chasing after a stock when it has already broken out or getting rid of a winning position even though you have not received any confirmation to sell.

Confidence. Scared money never succeeds. To do well, a trader must be confident in his ability to execute. This has nothing to do with arrogance or pride. But whenever you constantly second-guess your trades and question the timing of your own entries, you'll never be a prosperous trader. The hard part in all this is being able to get back your confidence after you have sustained a series of terrible losses. The only way to get over this is to keep applying all the other good habits that have been mentioned above. Whenever you make it a point to stick to them, the self-confidence will come back.

If you would like to be an effective trader, you have to be able to specify what your goals are, prepare a plan for achieving them, and stick to it. Your decisions had better be based on knowledge, discipline, patience, and faith in your own abilities. There's zero room for sentimental emotions. Mastering superb trading habits is not easy, but those who are willing and eager to get better will find it extremely rewarding.

Aroon Indicator - Trend Following Tool

Overview

The Aroon indicator anticipates when a security is changing from an impulsive move to a trading range and vice versa. The indicator was developed by Tushar Chande, who also created the Chande Momentum Oscillator and the Qstick. The indicator displays two plots: (1) Up and (2) Down. The standard period for the Aroon Up and Aroon Down is 25-periods.

Trading Rules

There are some very basic rules that traders can use by analyzing the relationship between the Aroon Up and Aroon Down. There are three basic rules: (1) extreme readings, (2) parallel movement between Up and Down, and (3) crossovers between Up and Down.

Extreme Readings

The indicator has a maximum value of 100 and a minimum value of 0. When the Up reaches 100, it is an early sign that traders are overly bullish and a counter move is likely. Conversely, when the Down reaches 100, it is an early sign that traders are overly bearish and a bounce is in order. Buying and selling these extreme readings works best in markets that are range bound. In trending markets, the Aroon lines will hover around 100 for a number of sessions. This is an indication that the current move is impulsive. During these impulsive moves, traders should add to their positions on any counter moves.

Parallel Movement

When the Up and Down lines run parallel to each other, it is a sign that the security is in a sideways consolidation period. This is often the case before a pending breakout. Traders should wait for the price and volume to increase in the security prior to initiating any new positions.

Crossovers

When the Up crosses above the Down, it is a sign of a potential bullish move. Conversely, a cross of the Down through the Up implies a bearish move is underway. In choppy markets Aroon line crossovers will generate a number of false signals, so traders should use other indicators to confirm the strength of the cross.

What To Look For When The Market Hits A Top

Market tops are extremely profitable for short sellers. Tops are usually much more exaggerated than bottoms and last only for a short amount of time. This presents a small "window of opportunity" for investors to take notice.

Short Interest

Proven strategies are nothing compared to watching short interest. When the market is forming a top on a chart, the amount of short interest tells traders how many shares are sold short - essentially how many people think the stock price will drop. Watching short interest will improve your trading and help you meet your trading goals.

Technical Analysis

Technical analysis, such as RSI topping or divergence, can help predict weakness in the market. As tops come to an end, RSI charts usually make a double peak, the second lower than the first. If the RSI and price are moving in different directions, the price is likely to fall. Technical analysis is best applied in each timeframe to gauge how big each movement will be.

Strategies for Gapping Down

A true top is made definite by a gap down, indicating that sellers are pushing the price down. Develop your own strategies for gapping down to profit heavily. Many traders use technical analysis, and then use a gap down to confirm. Gaps are the biggest indicator of sentiment; if a stock prices gaps down, it's probably about to enter a down trend.

Look Back at Historical References

What happened the last time the stock topped? When it was $50 a share? Watching horizontal trendlines is a great way to improve your trading. If the stock dropped after reaching $50 a year ago, it probably will act similarly again. This should always be confirmed first by technical analysis or your own custom indicators. Either way, history is a great way to predict the future.

Investor Sentiment

Another great way to predict long term tops is to see how everyone else is reacting. When the media started showing stories of the great wealth achieved in real estate, the market failed just a few months later. Indeed, the media is one of the best indicators of a top. When it seems that everyone is involved in the upswing, the only logical response is that investors will flood out. This was true with the 1990 housing bubble and the tech bubble.

Reading Candlestick Charts Like A Professional

Candlestick patterns are used by each and every kind of trader. Day trading and swing trading utilize candlesticks as a way to read chart patterns quickly and efficiently, while getting the same data offered by bar and HLOC charts. Professional traders love candlesticks because they can be read much quicker than a bar chart, while also allowing a different kind of technical analysis known as candlestick reading.

Modify for Your Style

Your trading style has much to do with whether or not candlesticks can become a part of your everyday trading technique. Developing a trading plan around candlesticks can be difficult, and thus, it is best to use candlesticks to supplement an already complete trading plan. There are many trading seminars put on by professional traders to study the key to candlestick investing and why chart patterns exist.

Candlesticks are just one of many tools to make consistent profits. Just as Japanese traders have used for hundreds of years, candlesticks can show chart patterns before they happen. For example, a large wick with a small downward body at the end indicates indecision, or that the market may be ready for a reversal. It would be hard even for a professional trader to see this without the graphical display that candlesticks give to an investor.

Use Your Own Plan

Investing is difficult enough without the use of candlesticks. Many traders prefer to use their own basic trading plan and then incorporate candlestick chart patterns as a confirmation. The day trader prefers these candlestick chart patterns because scalping and other short term positions have very small windows of opportunity. Candlesticks let you read and comprehend more data in less time.

A complete trading plan should allow for some candlestick patterns and other chart formations. A well worked strategy can handle the addition of a candlestick confirmation, while less complex strategies might not be diverse enough to accompany candlesticks. Many profitable trading strategies use a mix of both, straight technical analysis mixed with candlestick reading to produce consistent profits.

Use a Planner

A trading plan planner will help you throw in a mix of candlesticks without overdoing your strategy with too many variables. For the most part, a candlestick chart is just like a bar chart, but is also its own technical indicator. For instance, a small cross-like candlestick often means the bottom or the top of a chart, thus buying or selling should ensue depending on current momentum.

Day Trading System - Software For Sure Gaining Day Trading

If one is considering in engaging in day trading, the thing that one can expect is that profits and loses can happen in just one day. Day trading has been called so because all the transactions happen only during the day. This is done to get rid of dent of stock prices after each day of trading.

In day trading, several transactions, usually short term ones, are taking place. This is due to the fact that investors want to sell the stock or keep it at hand and wait for the time the stock to go up. No wonder, day traders have been labeled as "Gambits" due to the risk involves. Usually, day traders tend to gamble on stocks and sometimes have to take loan just to buy a potential stock.

Day trading is not that easy. Although it has some promising gains for those who would like to engage on it, still the risk factor is very high. One could not just bet for a certain stock and expect it to be high in the next day. That is why, financial analysts or money managers are hired by some investors just to get a sure deal in the stock market. Of course, one has to pay with some extra cash in exchange for the expert advise of the financial analyst or money managers.

While this can be true to traditional trading, a new and revolutionized way of doing day trading can now be readily available. This is through the use of Trading Grail software. Trading software is a better alternative for investors who would like to do it away with money managers and would like to have a hands-on management of their investment in day trading.

Perhaps, the most important thing in day trading is to get some trends in order to predict a certain rise and fall of a stock. This can be done through Trading software. Whether one is trading with Dow Eminis, Nasdaq or even the Forex market, this can be a perfect tool one can have to get track the latest trend and get to know the forecasted trend in order to have a sound decision on one's investment.

The good thing about using Trading Grail is that it has its own indicator whether one stock is a bullish or a bearish. While others tend to get some subjective facts, this software utilizes the present data and send some signals to its users. Long signal would mean that market is at its momentum. On the other hand, short signal signifies a bearish tendency due to some setbacks.

In terms of foreign exchange trading, Trading Grail is can also be a good tool. While there could be many factors that can affect the value of currency, nevertheless, it is sensitive to any foreign exchange movement and can predict the outcome of the value of a certain foreign exchange trading. The most challenging task when one begins the foreign exchange trading is the guessing period. This is when one tends to be optimistic on some foreign exchange deal and invest one's money without checking for its viability. While this tendency could be very dangerous and risky, however, with Trading Grail, one should not be worried anymore with the risk that might go with forex trading. It can be the answer to the very uncertain forex market.

If there is one software that one would tend to use whether in day trading or in foreign exchange market, it would be the stand out from them. Designed by a team of expert day traders and software engineers, one would surely be satisfied of how Trading Grail works!

The Facts of Online Day Trading

Day traders employ a multitude of techniques mainly because they want to gain more profit and succeed in their craft. However, it is a fact of life that day trading is somehow risky and not everyone who engages in it ends up on the winning end. Therefore, before you plunge into the decision of becoming a day trader, you first have to pay careful attention in learning and analyzing the chart and stock patterns before purchasing a particular stock.

Online day trading has become popular because of its convenient nature.

First and foremost, the Internet is in full operation for twenty four hours. Some clients find the time to survey the stock market at the end of the day or before they turn in at night. Thus, there is a greater chance that you can cover a larger number of clienteles. Likewise, the Internet hosts a wide array of choices when it comes to stocks. It is then an advantage on your part since you can conveniently watch the behavior of the market wherever you may be and also purchase new stocks if you wish.

Meanwhile, it is significant that you take enough time to look into many of the considerations regarding online day trading before arriving at the decision of participating in the trend.

Here are some of the tips that you can ponder on:

Learn a variety of techniques. Before you enlist yourself as a full fledged online day trader, you should first collect as much knowledge as possible. You can take online tutorials, partake in the online forums, read newsletters, study through the cd-rom packages, or attend live seminars or webinars. Keeping yourself educated is an important ace in facing the world of the stock market.

Check out the demo account. Many of the online companies provide a demo account wherein you can practice your skills in day trading without further investing real money. In this way, you can better get to learn the ropes of the trade.

Research on the company's profile. You will not want to risk your money for nothing in return. Better yet, take the time to study the characteristics of the company that you are to deal with. At least, you will be forewarned should anything fishy happen.

Start small. Since you will just be figuring out your future as an online day trader, it is best to employ a small amount of money for starters. If ever you lose, you will not be disappointed that much because you engaged only a small part of your wealth.

With all these pieces of information, you are more confident to face your career with online day trading.

Day Trading - The Value of Patience in Trading

Not everyone can get into the business of day trading for the simple reason that personality is a crucial factor. It separates the good risk takers from the chickenhearted and it defines who have a good trade way ahead of them.

One's style in controlling his emotions will be a prediction of how long he can stay in the business, the approximation of his profits and losses and on some occasions, the trade that he will pick up. Apparently, the right mixture of emotions could be very beneficial on the trader and patience is one of the most useful emotions in advancing a trading career.

Being able to wait- to restrain yourself from making up the lost trades, to discriminate between what to buy and what to sell, and to pull the stops on time- is one of the very few qualities that a good trader possesses. It may be an old adage but patience is really a virtue.

People who are not properly oriented in this business normally picture a day trader as someone who puts on brightly colored shirts which give the impression of excitement and waves his hands about while shouting or cursing on his losses and winnings. Well, this used to be the case. But nowadays, current day traders are people who are seriously looking at their computer screens, silent, patiently waiting on any changes in the market that they could take advantage of or watchfully observing the behavior of the market waiting for the next good trade to come.

Day traders are patient people. Many of them have learned this the hard way. They can't simply give up on the first streak of bad luck or rejoice on a passing success. They always have to keep their emotions in control; otherwise they could be riding on random trades and lose money in the process.

Patience tells them that they have to wait for something more without being greedy or fearful in their decision-making.

This does not mean though that they should be idle for they simply can't afford that. They have to be alert on any changes in the market or their trades. They always have to focus on what's going on. They have to be on guard on anything that could be detrimental to their trades.

Without sufficient patience, a trader will be drawn to endless cycles of any trading that doesn't match their capacities because they got bored and needed to trade just anything.

Day Trading Tips - The Do's of Trading

Day trading is not an easy job and it takes a lot of time to perfect. The bad thing is there are no short cuts or quick fixes to it, there are only solutions. Here are some trading do's that will help you find the right trading set up that will work for you.

Always set a stop for your trades based on quantifiable information. Don't put your money at risk because someone said so.

Refrain from becoming a news trader. Don't rely solely on the news while trading, imagine how much time it takes for the news to reach you. In fact in almost all cases you should trust the rumor more than the news.

Position only in those trades that you are familiar with. Never try to get into a trade that you have no substantial knowledge of. Each trade has its behavior, know this behavior first before you play with it.

Trading systems may not be consistent in all markets. Match the trading system with its respective market. What works in the down market may not work in the up market.

Identify the trend and take advantage of it. Remember that patterns are always there; only one trend will always be more dominant than the other. Enter a trade when it is starting to pick up or when it already has a trend but try to be discretionary in trades that are starting to lose their positive trends.

It will always be easier for you to enter a losing trade; however, it is a lot more dangerous than a winning trade.

Always chose the right timing. Compute for probabilities and analyze the market indicators but don't let analyses paralyze your actions.

News only goes as far as yesterday. It will only tell you things that have already happened but it's not a good predictor of what is going to happen. If you read this morning's paper, you are reading history.

As much as possible don't get into the trade late but get out of it early. These positions are usually the most expensive.

Get out of the trade while everyone else is still in. Don't be the last person to get out of it.

Go for one big move instead of few moves with very low returns.

If you are losing trades days in a row, maybe all you need is a break. Try to put it off for a day.

Ride the momentum, if you are winning trades don't stop but don't push your trades too far or you might lose everything you have won.

There are only two crucial questions in day trading- is the market going up or is it going down? Answering these questions will give you a better judgment on what actions to take.

Lastly, if everything else fails, sell.

Momentum Traders

Overview

Momentum traders are truly a unique group of individuals. Unlike other traders or analysts who dissect a company's financial statements or chart patterns, a momentum trader is only concerned with stocks in the news. These stocks will be the high percentage and volume movers of the day.

Times They Trade

Momentum traders will limit the times they trade to the first and last hour of the trading session. This is due to the increased volatility that takes place during these two time slots. The most dangerous time zone for momentum traders is during lunch (12 - 2pm), where volume dries up and the moves are choppy to flat. Many seasoned momentum traders have learned to respect this time zone as a result of a of a trading blunder.

Tool of Choice

The tool of choice for momentum traders is the level II window. The level II window displays the bids and asks for the underlying security. As momentum traders gain experience, they will develop a keen since for the movement of the tape. The key to being a successful momentum trader is to know when to exit the position. Since momentum traders initiate positions during the most volatile times during the trading day, sharp corrections are commonplace. This is why it is imperative that prior to diving into the momentum game, traders must become acclimated to the speed of the market.

Conclusion

While momentum trading is extremely challenging, it can be mastered. One of the greatest momentum traders is Ken Wolff. He has been teaching traders how to successfully use momentum techniques since 1997. Like any other form of trading, discipline is the key to success.

Day Trading For Beginners

Up until recently, "day trading" was a practice that was shunned by Wall Street's big boys. Nowadays, it's become much more popular and is a common practice amongst folks of all ages and financial trading backgrounds. Day trading, as the name implies, is when you buy and sell financial investments during the day and settle all your outstanding positions prior to the market closing. The main goal is to make fast profits from any price increases or decreases that happen during a single day of trading.

When the stock market closes down, any news that is put out later on can bear on the opening price of a financial instrument on the next trading day. From a strategical standpoint, day trading brings down the risk of incurring a loss overnight due to differences between an opening price and the previous day's ending price. Stocks, options, futures, and currencies are the most frequently day traded financial instruments.

The most significant thing that a beginner needs to know about day trading is that while it can be highly profitable, it's also very risky. Modern statistics indicate that 70-90% of all day traders incur losses in their trades. These statistics are nearly as high as those affiliated with losses from gambling, and are a clear-cut indication that day trading isn't meant for amateurs who hope to "strike it rich" in a short period of time. Really, there are very few individual investors who have the time, money, and personality required to deal with the losses of day trading.

If you're seriously thinking about becoming a day trader, here is some basic advice about the practice that could help you along:

Funds needed. According to U.S. law, you'll need at the least $25,000 to day trade stocks (more than 8 roundtrip trades in a single calendar week). To day trade currencies, you only need a few hundred bucks. Because of the smaller startup capital requirement, it might be wise to start with trading currencies if you're a novice. Additionally, trading currencies is also a great deal simpler than trading stocks since you only have a fixed amount of currencies that you can decide to trade.

Sustaining losses. The majority of new day traders will incur terrible losses in their first few months. That's how come so many of them give up before they even begin to make money. Once you embark upon day trading, be sure you only utilize money that you are able to lose. It's a very bad idea to use money that's needed for things such as your mortgage payments, your life insurance policy, or your every day living expenses.

Limiting your losses. Among the biggest causes why day traders lose money is because they don't know how to restrict their losses. There's no particular formula on when and how to limit your losses, but perhaps this scenario could help you interpret what normally happens. An unskilled day trader purchases a stock and the price of the stock instantly begins falling. The day trader chooses to wait because he is confident the price will come back up again. The stock's price continues to go down during the day, and the day trader kicks himself for not having cut his losses sooner. Upon market closing time, he assures himself he has no option but to hold on to the stock. In the evening, bad news about the stock is brought out, making the opening price of the stock to spiral down even more. Our day trader is now a good deal less wealthier than he would have been had he cut his losses when the stock first started dropping.

Day trading is not the same thing as investing. Day traders don't invest their money in financial instruments, at least not in the classical sense. They commonly check for stocks prices that are moving up or down. Their aim is to ride the wave, and settle their position before the trend begins to go the other way. You're not investing cash in a company because you believe it will produce value.

Day trading is not a hobby. Professional day traders sit down at their computers the entire day and watch for any price movements. There is nothing relaxing or fun about watching price fluctuations and ticker quotes. If you do not have the patience for this, then it's probably better you find another way of making extra money.

Becoming a prosperous day trader is by no means effortless, but it is possible. This advice was not intended to deter aspiring day traders in any way. But before you choose if this is the right direction to go, cautiously consider what has been written here. Day trading can be a tough business and you have to be prepared for it, both financially and mentally.

Day Trading - Traits of a Day Trader - Part 2

There are certain characteristics in a person that separate the line between successful day traders and easy losers. Apart from having good emotional control, above average I.Q. and having a good reserve of risk capital successful traders also have other characteristics that are quite hard to develop for some but are readily available for others. Here are some of these characteristics:

They have a definite business plan

All business people, including day traders, should have a business plan. This helps define what decisions to take when faced with a certain condition. This plan helps them make the proper decisions that will lessen their chances of bankruptcy while increasing the probability of earning. A business plan is a guide, more like a personal manual, that allows a person to look at his business in its most important aspects. Day trading is a business and should be treated as such. As much as you won't open any other business without a comprehensive plan, you should not also enter into this kind of trade without a list of your objectives or realistic expectations backed by a business plan.

They are good mangers of their money.

This trade is all about the capacity to deal well with money, the risk management and tolerance level to risks that could threaten your shares. The main idea, of course, is to multiply the money at hand. Second is to keep your money in your pocket. Successful day traders should be able to protect their own money or accounts, treating them as if they are the single, most important thing in the trading world. Next, they have to increase the money they have by earning in the trade. They simply cannot trade tomorrow if they aren't able to protect their money today. Yes, they take risks but the risks should be small enough that they won't mess up their accounts.

They live through the day.

Many day traders enter the trade with all their money at hand and leave without a decent bill, sometimes even with a debt. This is a common scenario but this should not be the case. Successful people in this field choose their battles, they don't simply look at the charts, choose which they think is most lucrative and place all their money in one place. They are conscious of their actions and they think hard on them. They don't just make easy decisions, with fingers crossed hoping that the trend will go their way.

Day Trading, Swing Trading, Or Long-Term Trading - How Do You Choose To Profit?

There are many different ways to profit in today's exciting stock market. Long term investing in the stock market is a good option for those who put their trust in companies that are reliable and are continuing to grow. This can yield excellent results for investors and has long been the norm in stock investing. This is not the only way to profit from today's vibrant market as there are many different trading opportunities available.

Short-term traders can also find investment opportunities in the market. Market prices can change rapidly when traders get nervous and sell their stocks or go into a buying frenzy. This type of trader psychology can make stock prices fall quickly, and sometimes rise rapidly. This may happen even when the fundamental financial numbers don't reflect this.

Why do traders get nervous about their stocks? It could be as simple as a rumor, or more reliable resources like news reports and government concerns about the economy. This could cause an investor to think that a company will find financial trouble or increase in value. If a stock goes up or down, some traders will dive into the stock and cause the price per stock to rise quickly. The market will once again fall back into place, but quick-witted. short-term traders are smart to watch the market and take advantage of price changes that may offer a profit.

Position Traders - Of the three styles of trading, position trading has the longest term of trading. Position trading stocks may be kept for a long time as compared with day trading and others short-term stock trading methods. These traders will choose to hold on to their stocks for months to several years. Position traders will wait for a fundamental change in the financial reports, industry analysis, or stock value before they consider selling their stock. Position trading requires little time from the investor. The stock holder will simply check the market reports daily to plan their trading strategies. This is great for the person who is just looking to make a little income on the side. The investor may work a half hour a day after their regular day of work.

Swing Traders - A swing trader is an trader who generally holds stock for a short period of time, typically from one to five days. A swing trader looks to jump on market swings. This technique of trading will require a lot of time, but also can often yield sizeable return on investment. They will usually research stocks and plan investments for several hours a day. Swing traders look for trends in the market to help map out their opportunities. They use intraday and daily charts to predict how their stock may move.

Day Traders - For those who enjoy taking risks and like fast-paced trading action, day trading is a perfect way to play the market. Those who are educated day traders have learned how to decrease their risk and maximize potential profit. A day trader is someone who buys and sells stocks very quickly. The stocks could be bought and sold for a few minutes or a few hours, but always held on to for less than a day. Day traders frequently analyze data on the tick, minute, and hourly levels. This is not the place for an emotional trader. Because this type of trade requires so much time, it is only recommended for someone who wants to do this full-time.

Trading The Markets - Making It On Your Own

Self-Employment is a growing career option for many people. Approximately 6.6% of the work force makes their living in this category or over 8.5 million workers nationwide. As a trader, you join the ranks of the self-employed, which is a terrific way to control your own destiny and take full responsibility for all you do.

As you begin your self-employment, you will probably find it beneficial to talk with colleagues - other traders who went out on their own. Role models are extremely important if you're considering this step into business. The challenges they have faced in getting their business off the ground and the obstacles they have overcome will be great stories to hear. Copying the success of others and avoiding the mistakes you see them make is normal practice in business.

Joseph Anthony, author of "Working for Yourself" recommends that those considering self-employment have a variety of skills, motivators, and attributes, for example:


Having Self-confidence


Sense of timing or business intuition


Viewing security as a state of mind


Willingness to invest in your savings


Competitiveness


Comfort with not receiving a regular check

No self-employed person will ever tell you it is easy. Sure, you can often work in your jeans and t-shirt, but most self-employed traders work well beyond the traditional 8-hour day. It requires a number of skills that those who work in a regular office do not need, including a strong sense of self-discipline and developing a new self-reliant mindset. As your own boss, you need to manage yourself, become self-motivated, perform well under pressure, and deal with setbacks.

The freedom that trading allows is highly motivating. While it may be stressful to some, seasoned traders relish their freedom. Every trader is on his or her own path. This individual journey can be a challenge, but for most seasoned traders, freedom is power.

In the mean time, Good Luck on your journey to success...

OR If you would like to immensely improve your trading and investing results, check out

Day Trading - So Where to Begin?

The profitability of day trading oftentimes lures people to make a living out of it. But just like in all other businesses- trading is a business and it should be treated as such- there are certain places where you should start. Novice traders are often faced with tough decisions like what trade to begin with? How much risk should be taken? Or what are the futures that suit your trading style best? These questions are of course impossible to answer in one sitting. Even training courses on trading can't supplement the theories and principles alone but not the flexing of your staying power in the trading pit. It takes experience to acknowledge the realities of this business. However, it helps to know some of the more important issues when beginning to trade.

First of course is the assessment of your money. Not all people have money to trade. And not all money should be traded. Before trading, you have to determine how much money you are willing to risk. This is largely dependent on how much is left after fixed expenses are paid.

In principle, only 10% of your total risk capital should be used in trading. This will leave enough money as back-up money when you are on a losing streak. Also, this will provide enough elbow room to make adjustments in trading styles.

Trading power revolves around how much money you can work with but should be sufficient enough as not to limit the kinds of trades that you want to enter. The truth is, the less money you have the more afraid you are to make decisions. Thus the lesser chances on getting some of the good trades.

Another point to consider is the type of market you want to enter. For most people, this is pure common sense- you only enter the waters that you are familiar with. You cannot blindly take trades without prior knowledge of their nature and hope that such a trade would work for you. Some people do get lucky sometimes but this is not true for everyone. You have to study the trades first because, this will eliminate unwarranted losses and second, this will increase the possibility of profiting.

Lastly, you have to understand the technicalities of day trading. This business is highly technical however information can't be gathered just from experience but also from training courses, books and supplementary resources.