Over the past couple of years, the world of trading has become very hectic and chaotic. You can probably guess why the trade fluctuates so much. Due to Covid-19, it is becoming increasingly difficult to even be in the same place with people. For traders, for example in the stock market, this makes things much more difficult, but we still need a lot of people who know how to day trade for a living.
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Day trading, what is it?
This brings us to day trading. You may have heard of it, you may not. Either way, it’s always nice to freshen up. The definition of day trading refers to buying and selling “securities” online, usually on the same day. The point is to do this with short-term price fluctuations. There is really nothing to invest in day trading as we think about it. All he does is use price trends to make money. This can be seen most in the stock markets and foreign exchange.
This is a highly competitive job that will be extremely difficult for a newbie to navigate. Most intraday traders are themselves educated, funded and willing to do it all day. Many intraday traders follow the news to pay attention to market trends. In addition, organized events and announcements also help in this endeavor when they cover topics related to the economy.
Other Strategies for the Day Trader
Day traders use all sorts of tips and tricks to get ahead of the rest. Below are a few ways to make a living as a day trader.
- High frequency trading (HTF): This strategy uses an advanced algorithm to exploit market inefficiencies that tend to be short.
- News Based Trading: For this strategy, they use the news to keep an eye on possible trading options.
- Range trading: Range trading requires prices to be predetermined in order to figure out what traders plan to do on that day.
- scalping: Finally, this strategy is known for making profit several times during the day when prices change during the business day.
Intraday trading and why it can be controversial
In the halls of Wall Street, there is always talk about what the economy, prices, and profits will be like for the day. There are many trolls and scammers online who enjoy luring newbies with false promises.
There are many intraday traders who do not have sufficient knowledge and still do it. This may be related to a risk factor. Most financial advisors and managers will stay away from intraday trading. In their own words, they believe that there is too much risk for any reward you may receive. In addition, they stated that the transition to active strategies instead of more passive trading tends to be inferior in duration. Plus, there are fees and taxes involved as well, so you’ll be earning a lot less than expected.
While it’s a doable career, the risk-reward ratio is very tricky as it mostly takes luck and good timing to make it work.
Where does a day trader start?
Day traders are usually already quite experienced economists who have probably been in the field for many years and have received training. So, if you are looking for this path, you need your Game.
Day traders in this line of business are people who know how the market works. They are versed in technical analysis and charting in order to have a good understanding of market trends. In this field of activity, you need to have money for this to happen. A smart day trader only uses his risk capital and the money is only used for this kind of investment. The use of risk capital allows the trader to avoid losing large amounts of money, and emotions are not a decisive factor either.
Those who make a living day trading are those who work for banks and large corporations such as hedge funds. Today intraday traders have almost unlimited resources to achieve their goals.
What are the risks?
For a day trader, every day is a struggle. You can make millions or lose everything in just an hour. If you want to get into intraday trading, be aware of the following risks:
- Get ready to lose money, a lot.
- It’s a full-time job, long, boring and very stressful.
- You can quickly find yourself in debt because of how much money you borrow.
- You can see claims about how to get rich quick in this job. Don’t trust them. It takes classes and education to understand.
Conclusion: Is intraday trading right for you?
If you choose to make a living trading, this can be a lucrative job. However, it contains contradictions, high stress, higher risk, and low reward. This is a world dominated by some of the biggest bankers and capitalists in the world, so if you are a beginner, be prepared to face some challenges.
But, if you’re still interested, here are some tips:
- Have a lot of knowledge about how the market works and how intraday trading works.
- Realize that it will take a lot of time, money and effort to get it right. In the first few months, many fail and some don’t even make money.
- Start small.
- Keep calm always. Never use emotions when it comes to trading and try not to deviate from your plan.
If you can handle all of this, good luck!
