Archive for May, 2009

Learn Forex Trading in an Innovative and Easy Way

May 27

Posted by Day Trading editor in learn day trading | No Comments

Why Learn Forex trading?

The forex market is by far the largest market in the world. It is estimated that around $1.5 TRILLION is traded every single day. By far more then all the stock, bond and futures markets of the entire world combined! Forex or currency exchange is the term used to describe the trading of world currencies. A trade occurs when a trader simultaneously buy of one currency and sell of another one. E.g., to buy British pounds with US dollars. The currency combination used in a trade is called a pair.

What does a forex trader do?

Simple, buy a currency at a low value and sell it at a higher value, and in the process profit from it! For example, buy Great British Pounds with US Dollars, wait for the Pound rate to go up and make money! This can be done several times a day if the forex trader is a day trader or several times a week or month if the trader is a forex swing trader.

What are the main benefits of trading in the forex market?

Many currency pairs are very volatile. Volatility means that they move a lot during the day, from side to side, allowing traders to capture sometimes 5-6 price swings per day, each one potentially allowing the trader to make impressive profits.

5-7 currency pairs to monitor (instead of over 10,000 stocks!), no commission trading, guaranteed fills for stop losses and limit orders, impressive leverage.

The forex market is a 24 hour market. Never stops. This means that as a forex trader you can chose exactly when to trade. Some traders have day jobs and do not have the necessary time to trade during the day so they can trade at night. People who make their living as forex traders can chose to trade any time of the day or night. The point being, a 24 hour market allows the trader a lot of flexibility.

What are the Exclusive benefits offered by forex trading?

An incredible benefit of the forex industry is that today all forex brokers allow traders to open free demo accounts. This demo account has the full capabilities of a “real” account including live market rates, access to real-time market analysis, and the ability to execute trades off streaming prices. This means that the trader can test his or her strategies without risking a single dollar! No other business opportunity allows you to see if it works before you spend money!

Making a living as a forex trader allows you to be truly free! No office, no workers, no inventory, no marketing worries, no advertising, no selling.

Learning the right forex trading system allows the forex trader to trade by just following simple rules. If A happens and B happens then do C. This is called mechanical trading. It requires absolutely no discretion, interpretation or thinking from the trader.

In conclusion, Learning forex trading provides all level of investors with a lot of opportunities that many markets and industries do not provide. The reason many people have not heard of this opportunity until recently is that until not long ago trading currencies was reserved to the big dogs (banks, institutions, companies etc). Today with the help of the internet anyone can take advantage of on-line currency trading that was once reserved to an exclusive group.

Lissa Jannini
http://www.articlesbase.com/currency-trading-articles/learn-forex-trading-in-an-innovative-and-easy-way-92061.html

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Day Trading Strategy

May 27

Posted by Day Trading editor in day trading techniques | 4 Comments

A market that is trending up should have higher peaks and higher valleys. The majority of bars should also have higher highs and higher lows. In a down trend the market should have lower valleys and lower peaks and the majority of bars should have lower lows and lower highs.

When a market is in consolidation (bracketing/flat) the price will generally oscillate in a broad range. Traders who are watching for the breakout will monitor the security for a qualified break. They may place a straddle traded to catch the move regardless of whether it breaks up or down.

There are traders who specialize in trading consolidation. I don’t however recommend it to new traders simply because they get whipsawed too much.

Reading Gary Smiths book “How I trade for a living”, I came across a reference to an interview with Donald Sliter, a top S&P floor trader. When asked about his trading strategy he had replied that it is a matter of understanding strength and weakness. When asked to expand on that, he said, “I scalp to the short side if we are trading weak to the Dow. I scalp to the long side if we’re trading strong to the Dow.” The interviewers were amazed that one of the biggest traders in the S&P pit had such a simple strategy.

For me, this reinforces the idea that as an active day trader of the futures market, it is not about developing complex, high probability strategies; it is about having simple, logical, high frequency strategies that give an edge. There are different approaches to creating an edge in trading. One that I like is to have a technique for determining the trend of the market and then looking for opportunities in line with the trend. One of the problems of trading trend following strategies is that they generate frequent losses in non-trending markets. One way to mitigate this problem is to not trade the signals from your trend following strategy, but use them as a filter for your trades.

Lets say you use a moving average (or any other trend identification approach) to measure trends; instead of buying the market when it crosses the moving average, see it as a signal to look for buying opportunities. So your strategy is to be a buyer when the market is above the moving average and a seller when the market is below the moving average. You can then use any number of techniques for generating entry signals in line with the identified trend. If, for example, you are a fan of RSI or any other oscillator, use that as your entry signal, but only take signals in line with the trend as you see it.

When the market is trending, your trend following technique will keep you on the right side of the market and your entry signal is likely to produce multiple successful trades. When the market is range bound, you will still have the opportunity to trade profitably because you won’t be trading every breakout, you will be naturally drawn to buying dips and selling rallies (in line with your trend strategy signals).

Martin Chandra
http://www.articlesbase.com/non-fiction-articles/day-trading-strategy-88030.html

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Forex Day Trading Systems – They All Lose Because Their Curve Fitted

May 27

Posted by Day Trading editor in day trading systems | No Comments

Forex day trading systems are big business but the fact is they all lose, because their all curve fitted. If you don’t know what curve fitting is and you are considering a forex day trading system, read on.

Let’s start with some basic facts in relation to forex trading:

Millions of different people, all trading differently, trading trillions of dollars all contribute to the price and to say you can predict what this mass, diverse group of people can do in under a day is ridiculous.

All short term support and resistance is meaningless, as volatility is random within daily time frames, therefore you cannot use these levels to trade off.

Day trading sounds great making huge profits with low risk but the reality is a constant erosion of equity and a loss.

Why The Track Records You See are Flawed

You always see track records that make money but the catch is these systems have never been traded.

What the vendor does is curve fit the system (bend it to fit the data) they do this in hindsight on data and simply make it fit. The system then fails because no two pieces of data replicate themselves exactly.

One trader I know likened this to shooting at a barn door blindly and then drawing a circle around every shot, to make it look like a bulls-eye.

It’s done in hindsight and it’s easy to make money when you can bend your system to make a profit. Most day trading systems use the following CFTC disclaimer:

“CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN”.

So put the above on and you can say anything you like with regard to a track record and vendors do and you see forex scalping and day trading systems that make huge claims that never stand up in real time trading.

You will never find a real time track record of forex profits, with supporting account statements over the longer term.

Day trading appeals to naïve and greedy traders, who think forex Trading is easy but of course they soon get a reality check when they trade – a wipeout of equity.

UNLDERSTAND THIS

If you trade any market not just forex you need to use reliable data and this means using longer time frames to trade, where you can get the odds in your favor.

This means swing trading short term moves of a few days to around a week or trading longer term moves that last for weeks or months.

Both methods of trading have their merits and you can make money with them both which is more than can be said for forex day trading.

If you want to enjoy currency trading success trade valid data and trade the odds – it really is that simple.

Kelly Price
http://www.articlesbase.com/day-trading-articles/forex-day-trading-systems-they-all-lose-because-their-curve-fitted-281751.html

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Three Simple Forex Trading Strategies

May 27

Posted by Day Trading editor in day trading strategies | No Comments

No one ever said that trading success was easy. It takes time and you need to know and understand your market, as well as have a good bit of self control. These three simple Forex trading strategies will help keep you on track.

If someone tells you that you can continuously make money in a foreign exchange market they are either lying or they have no idea about the market they talk about. Foreign exchange has always been a volatile market and it still is today. Add trading on margin and the volatility goes up even more. But three simple Forex trading strategies can keep you in the green.

For you to make successful trades you need to understand and take into account the data and then make an informed decision based on your understanding and what you expect from the market. Just three simple Forex trading strategies will make all the difference to you.

1. Never trade with money unless you can afford to loose it

Trading on Forex markets is speculative and don’t let anyone tell you differently. That means losses can occur. It’s also exiting and somewhat addictive and the more you get involved the harder it is to clearly see what the right thing is to do. These three simple Forex trading strategies will certainly help keep you on track. Trading on Forex should enhance not hurt your life.

One of the keys to the three simple Forex trading strategies is to know your exit strategy. You should also determine what time frame you are making your trades on. What is it you want to get out of your money and the market? Sure you enjoy the thrill of the hunt but you really need to have a time frame and a goal of where you are going.

Use your three simple Forex trading strategies to do what the pro traders do. 9 and 14 RSI are the most common trend lines and then there are 9, 20, and 40 day moving averages. The closer you want to get to where the pro traders do the more precise your calculations for your estimates are going to have to do.

These three simple Forex trading strategies are just a start to the strategies available to try. If your life needs a little excitement and you could use a few extra dollars do give Forex trading a try.

Let these three simple Forex trading strategies be your guide.

Copyright © 2007 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author’s information with live links only.)

Joel Teo
http://www.articlesbase.com/finance-articles/three-simple-forex-trading-strategies-104251.html

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Forex Trading – Tips on Buying Courses & Systems

May 27

Posted by Day Trading editor in day trading courses | No Comments

Many traders are daunted by the thought of forex trading so they decide to get help from an expert mentor or guru.

Letâ??s look at some tips on how to choose one.

Firstly, the vast majority of advice sold on the net is either available free anyway, or simply does not work.

Think about it:

If you do trades with 70% accuracy, you would be to busy trading your way to millionaire status than bothering to crow about how good you are on the net, for $100 or so.

The Day trading myth

You have seen them guys promising you 10 â?? 100 pips a day in profit, or systems that are so accurate and consistent they canâ??t possibly be true.

Day trading is where the bulk of the courses are sold.

The myth is you can make money consistently and long term â?? Absolute rubbish.

Day trading is done in short time spans and all short term moves are random, so kiss goodbye to your equity.

Ask for a track record and see if you get one.

I never have! And by track record I mean a real not hypothetical one.

And don’t fall for the testimonial from a friend, or guy with lucky trade.

The More Expensive advice is the better it is.

Some advice costs a lot more than $100 or so, you can pay thousands for it.

The novice trader thinks it must be good as its expensive – not so.

Judge A vendor simply by if they have made money â?? thatâ??s the only criteria that counts.

Then decide if you understand the logic (if you donâ??t you wont be able to follow it with discipline) and without discipline you have no method in the first place.

Really want to succeed?

Go to your local bookstore and pick up some classic trading books, by traders who have walked the walk rather than are all talk.

Get these three great books

Market Wizards & The New Market Wizards â?? Jack Schwager

These are interviews with some of the top traders of all time and are great insight into what makes a great trader.

Trader Vic â?? Vic Sperandeo

This is a fantastic book – giving you everything you need to help you trade from money management to ideas on systems.

The above will cost you around $50.00 and will be money well spent.

There are other books but these are my favorites.

And if you read them:

They make clear that for success you rely on yourself and no one else.

Devise your own system (we have done loads of articles on this ) keep it simple, trade with discipline, show patience and perseverance and you can make it all on your own.

If you must buy advice get a track record and find one you understand and have confidence in but the best way to make money ( or the only way) is to do it on your own.

Sacha Tarkovsky
http://www.articlesbase.com/currency-trading-articles/forex-trading-tips-on-buying-courses-systems-113548.html

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Forex Day Trading – Critical Facts you Need to Know

May 22

Posted by Day Trading editor in learn day trading | No Comments

Here we are going to look at the facts in relation to forex day trading that are essential to learn if you do not want to lose your money. Lets look at forex day trading in more detail and how to make money from it.

You will see more adverts for forex day trading systems than any other method of trading and the headlines are enticing: â??scalp 100 pips a day, make a regular income, make 100k per annumâ? etc

FACT: All Daily Volatility Is Random

The problem is that Forex day trading simply doesnâ??t work and the above headlines are simply advertising hype. These vendors making money selling systems to naive or greedy traders not trading their systems!

So why doesnâ??t day trading work?

Well itâ??s pretty obvious and common sense the time period is to short.

All volatility in daily time frames is random and support and resistance levels are meaningless â?? you canâ??t get the odds in your favour so you will lose â?? PERIOD

If you think about it there are millions of traders trading trillions of dollars each day and to say that you can predict what this diverse mass will do in a few hours is laughable.

If you donâ??t believe that day trading doesnâ??t work try this task â?? Ask any vendor selling a forex day trading course for their real time track record of profits over two years and see if you get one.

Get ready for a long search!

Of course you wonâ??t get one because these systems are never traded by the vendor.

What you will get are testimonials (friends or made up) or a hypothetical track record of outstanding profits which is not worth the paper itâ??s written on.

For those of you who donâ??t know what a hypothetical track record is – its one thatâ??s done in hindsight, knowing the closing prices â?? well that hard!

Letâ??s see – if I knew the prices in advance I would be a multi millionaire but we donâ??t know the price in advance and itâ??s a lot harder in the real world!

The biggest myth in currency trading is that you can make money in Forex day trading â?? You cant.

Monica Hendrix
http://www.articlesbase.com/currency-trading-articles/forex-day-trading-critical-facts-you-need-to-know-211092.html

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Tips For Earning Money By Day Trading

May 22

Posted by Day Trading editor in day trading techniques | 15 Comments

Before you start investing your hard earned money, you need to really stop and assess your capabilities. Be aware that when you engage in any trading strategy your investment is always at stake. Don’t gamble with your money – plan it out the smart way. Successful investors are successful for a reason. They strictly followed a trading system and stuck to it, regardless what was going on in the stock market.

Today, there are thousands of people who are doing quite well for themselves using day trading. Using profit making techniques, day traders buy and sell stocks. It’s not that simple, of course, because you have to buy as well as sell at the same time.

The More You Know

Even if you don’t have a background in trading, almost everyone can understand the basics. Buy low, sell high, follow trends, and protect your investments. More advanced traders will have full knowledge of the history of exchanges for that given stock and choose a proven stock picking strategy.

Trend Following

In a nutshell, day traders assume that if a particular stock is steadily rising it will continue to rise, and likewise, if a stock is falling it will continue to fall. This can be measured over a prolonged period of time. Thus, traders will purchase rising stocks and avoid falling ones. Don’t worry about having to map up the trend lines on your own. Today there are lots of both free and paid software that are specifically designed for day traders. To find such software you can simply type “day trading software” into your favorite search engine.

Pay Attention To The News

The news has a very profound impact on stock trading. If a particular company has sent out a press release that they have invented a new technology or have acquired another company, its shares may surge. A great way to stay on top of the news for any particular company is subscribe to that companies RSS feed on Yahoo Finance, or to use the Google News Alerts (where you can get Google News to email you news based on certain keywords as it comes in).

Scalping

This is also called spread trading. Usually completed in 12 hours or less, small quantities of a given stock are purchased then the original buyer turns around and sells his shares for a miniscule higher amount than they were purchased for. Not anything to cry home about, but still a good, quick trade.

Covering Spread

This is a kind of leapfrogging of stocks. You buy stocks at the minimum bidding price and sell stocks at the so called asking price. At the end of the day, you will have the same amount of stocks, except that you will have stocks in a higher rated company.

John Morris
http://www.articlesbase.com/non-fiction-articles/tips-for-earning-money-by-day-trading-64186.html

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Day Trading Systems – How to Make Big Consistent Profits

May 22

Posted by Day Trading editor in day trading systems | 3 Comments

How do you pick a day treading system that makes big consistent profits and look at day trading systems that can help you win.

So, how can you pick the best day trading system to help you make big consistent profits?

Letâ??s find out.

The hype

On the Internet there are a huge number of systems sold in day trading and they sound great earn 70% profits, scalp 10 -20 pips everyday etc and all for a few hundred dollars or less!

So what makes a great day trading system?

Well the answer is:

Nothing â?? Because the logic of day trading does not work â?? PERIOD

Donâ??t believe me?

Then consider the following:

1. Have you ever seen a day trading system publish a track record of real profits thatâ??s made in the market NOT a hypothetical simulation?

No neither have I.

Ask any vendor selling a system for a real time track record over the longer term and you wonâ??t get one.

How day trading system vendors make their money then?

These vendors are not stupid enough to trade the system themselves! They sell them, despite the fact the logic does not work and can never work.

They will take you money for the system so they win, then you trade it and lose, thatâ??s simply the way it is.

So why canâ??t you win at day trading?

Its common sense really:

Volatility in daily and hourly frames is random.

Using daily ranges, support, resistance pivot points, or any other technical tool is a complete waste of time, as prices can go anywhere in a day and do.

The only people who look at daily ranges and consider them significant are day traders and their a very small losing minority of the millions of traders in the market.

Donâ??t fall for the hype of day trading.

Itâ??s a fact that day trading system vendors donâ??t produce real time track records as they are sensible enough not to trade their systems.

They know they lose money.

So why not write some great copy and make up a simulated hypothetical track record and make some money selling the system instead?

People who believe day trading works are either:

Stupid, naive or both.

Donâ??t fall into the trap of thinking day trading will make you money it wont and if you donâ??t believe me ask for the proof of a real time track record of long term gains before you buy,

Sacha Tarkovsky
http://www.articlesbase.com/investing-articles/day-trading-systems-how-to-make-big-consistent-profits-121390.html

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Online Forex Trading Strategies Reviled

May 22

Posted by Day Trading editor in day trading strategies | No Comments

The Misunderstood Market “Online Trading Strategies Reviled”

Most people have a basic idea of how the stock market works. You are basically putting your money behind a company that you believe will be profitable and waiting for the moment that your profits are high and you want to pull out. A rudimentary explanation would be to say you are lending money to a company in hopes they will be able to pay you back, and then some.

Most people have heard of forex trading, but don’t really understand it and certainly don’t know how about going about it. Forex is the largest free market in the world, although small individual investors typically do not participate due to a lack of understanding and security.

Forex trading runs a high risk for big profits and large losses. It is a fairly volatile market, but there are a few secrets to forex trading that can help you determine if it’s right for you. Forex trading is a short term profit aim rather than a long haul hopefully as stocks tend to be.

Forex trading is basically just trading money. You trade your shekels in for dollars and your dollars for yen and hopefully come out ahead at the end of the day. Depending on the inconsistent but sharp turns in the market, an online investor can find themselves handsomely in profit at the end of the day.

Three Basic Secrets to Online Forex Trading

There are three very basic secrets to online forex trading. These three strategies are very helpful to the private online investor in reducing some risk and maximizing profits. It is important to recognize that while the secrets offered are not guarantees of success, understanding these strategies will help any online investor carve a faster path toward success.

“Online Forex Trading Strategies Reviled”. There are more in depth strategies available, and by far one of the best independent web sites to gather you investment strategy information is onlinetradingideas. Here you will find a variety of helpful investment strategies as well as independent research and information to guide you on your way.

There is a wide range of forex trading strategies out there. Some apply to the individual online investor while others are geared more toward international firms. All of the strategies are designed to take advantage of the forex trading market’s ability to produce very fast results.

Online Forex Trading Success

The most successful online forex trading strategy is leverage. Leverage allows an individual investor access to more funds than their initial deposit. I know it sounds a little far fetched, but this strategy is implemented by the most successful individual online forex investors on a regular basis.

There is a plethora of information on leveraging liquid assets on onlinetradingideas. Leverage allows an individual investor to utilize funds as much as one hundred times their initial deposit. This is quite exciting and can help even the average online investor pull ahead of the pack. Leverage is the fastest and simplest way to maximize the benefits forex trading offers. It is also the easiest way to maximize the benefits of short term fluctuations in the forex market.

“Online Forex Trading Strategies Reviled” The second most successful forex trading tool is the use of a stop loss order. Stop loss orders allow the online investor to set a predetermined loss margin. Should the currencies you are trading fall below your tolerance level, your order will automatically cease and your losses will be minimal. The drawback to the stop loss order is that with the volatile nature of online forex trading there is always a chance that the currencies will rebound quickly. A stop loss order does not allow for your order to be reinstated when the market returns to a more favorable position.

A stop loss order is the perfect forex investment strategy for the new or beginning investor. While you are still learning the basic secrets to forex trading, you can protect yourself from huge losses while still maximizing your gains.

Many online forex investors also utilize the automatic entry order. Automatic entry orders allow the online forex investor to set a predetermined price they are willing to pay for entry into the forex market. Automatic entry orders are a solid protection for the online forex investor. As fast and convenient as the internet is, your order is not executed the instant you hit the send button. There is enough time for the market to fluctuate from the time your order is placed until it is executed. Automatic entry orders protect you from this fluctuation.

Protecting Yourself from the Wolves “Online Forex Trading Strategies Reviled”

When deciding to look into online forex trading you will be faced with countless websites offering to make you a successful and wealthy online forex trader. Many will offer you a seven day free trial so you can learn while you earn. It takes more than seven days and some special software to create success in the forex trade market. Just like any other highly profitable situation, it takes knowledge and practice and skills that develop over time. You simply can not rush out there into the forex world and quit your job in a week to lounge around in your underwear while mastering online forex investing.

Be exceedingly cautious of any website promising you wealth beyond your wildest dreams if you simple buy their software and become a member of their trading club. Unless Publisher’s Clearing House is on your doorstep handing you one of those big fake cardboard checks, success simply doesn’t come that easily. Otherwise we would have done away with our welfare system years ago because everyone would be wealthy.

As profitable as online forex trading can be, approach it just as you would any other investment venture. Using caution and a bit of skepticism may very well save you some heartache and loss as you enter this exciting world of finance.

Managed Forex Trading

For those who understand the massive profit potential of online forex trading but do not feel they have the skills or perhaps haven’t had the time to learn the skills can opt for a managed forex trading account. They have become quite popular among online investors and most investors admit to feeling more secure with someone else at the reigns.

Managed online forex trading works like any other managed trading account. Your job is to tell your broker what your risk tolerance is and then step back. From there, your broker is responsible for buying and selling currencies on your behalf. Of course, there will be much higher commissions to pay, but they can be well worth it if you want in on the online forex trading action but lack the appropriate knowledge.

Education is the Best Management “Online Forex Trading Strategies Reviled”

Even if you choose to start your online forex trading career by utilizing a broker, there is no replacement for learning everything you can about online forex trading. While the three basic secrets covered here are a good place to start, you will need to expand your horizons regardless.

There are ample website out there looking to sell you the information you think you need, although most of them are really in the business of selling the information rather than forex trading. They will offer you software and downloads and e-books and forums, but they are only interested in your initial registration fee. Don’t get me wrong, there are a few out there who will actually provide you with the information that you are seeking and do it well, but weeding those particular websites out from the mountains of junk sites is a very tall order.

Being able to understand your own financial health is one of the best forms of success. If you know noting about it how can you ever achieve it? Simple, easy to understand, down to earth information is really what you’re looking for. As you progress in your understanding and knowledge you are then looking for a suitable place to expand on the basics. Most of them charge for information websites are simply not looking to provide you with the real materials you need to know where you’re going and how to get there.

That is why on-line-trading-ideas is becoming so popular among internet traders. Regardless of whether you are looking to understand online forex trading or you’re interested in the less volatile online stock trades, this website can empower you to make healthy financial decisions.

You don’t have to fork over your credit card number in order to find out how true these statements are. All you have to do is point your browser and off you go. You owe it to yourself as well as your financial future to discover the information that can be right at your fingertips.

Since you have nothing to lose, why not log on and just check it out for yourself. Once you are there, learn all you can about the online forex trading market. You’ll be glad you did. From there on out you can start to learn what confident, happy forex trading is all about.

Bobby Ryatt
http://www.articlesbase.com/finance-articles/online-forex-trading-strategies-reviled-87086.html

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The Pitfalls Of Day Trading Stock Online

May 22

Posted by Day Trading editor in day trading courses | No Comments

An intelligent trader once said, `The only difference between gambling at a cassino and day trading stock online is that you have to serve yourself drinks when sitting at your home computer.`

Sure… some day traders have made some decent money through day trading stock online. But these are the exception, not the rule. Most day traders lose in the long run and that `long run` aint too long at times!

You see, the trouble is… most day traders are seeking a `quick fix`. Their persona isn`t suited to mid term or long term trading. They quite likely have lost money in the past, either through gambling of some sort, or through losing patience with longer term trading strategies that turned sour. They most likely don`t have a large capital base, especially if they`ve been wiped out a few times in the past. And so the concept of… day trading stock online is incredibly appealing.

Unfortunately, far too many traders who`ve either made the switch to day trading – or who are brand spanking new to it and thereby lack basic risk management skills, embark on a journey they`ll never forget… for the wrong reasons!

For one thing, seduced by the apparent simplicity of it all, many traders approach the whole thing of day trading stock online without really knowing what they`re doing. Secondly, they have little or no concept of the underlying risks involved. Thirdly, as I`ve already alluded to, they often find themselves `horribly undercapitalized`. Fourthly, and most definitely a deal-killer…

They play with borrowed funds!

Not a good move… and a breach of fundamental trading basics to boot!

So, is it even possible to make a living from day trading stock online?

Yes it is. But the odds are stacked against you from day one. You absolutely positively HAVE TO HAVE A PLAN… or you`ll lose… simple as that.

For starters… you have to know your entry and exit points BEFORE entering the market. It`s no good waiting until the market has moved so far against you that you`re too frightened to take the loss! When you participate in day trading stock online you have to leave your emotions at the door and follow your plan like your life depends on it (which some might argue `it does`).

Suppose you buy 1,000 shares of abc-xyz at $1 per share – on a day trading basis… and you notice that the stock rises 30 cents a share before lunch. The left-side of your brain coolly advises you to `get out and pocket a massive $300 profit`. Hells bells… 30% in a morning is a good earn!

However, you also have this other side of your brain which has no basis in logic. It is commonly referred to as the `emotional side` or right-side of your brain. It also has a deeply embedded relationship with every gambler`s nemisis… `Greed`. Accordingly, you decide in your professional lack of wisdom to… `Just hold on in there a little longer… it`s bound to go higher`.

You go out and make some lunch, have a coffee… and smile…in the knowledge that you`re a day trading wizard who is on the brink of making a fortune. And it`s all so damn easy!

1.45pm…

The stock has reached intraday highs of $1.37… `Maybe it`ll hit $1.50 by closing bell?`

2.52pm…

News comes out that the company`s patent is invalid… the stock plunges to $0.60 in three minutes…

For you, the dream has not only been shattered, but the sky has just fallen in… and your $1,000 investment has reversed a $337 profit into a $400 loss… and it`s still falling.

You find yourself hurled into a maelstrom of helplessness, fear and chaos…but with no plan in place, you simply hang on in there.

3.30 pm…

Trading in the stock is suspended. The last trade went through at $0.42. You are so stunned you can`t even shed a tear. Your day trading career lasted precisely 6 hours, 22 minutes and 8 seconds…

`Welcome to the frenetic world of… day trading stock online`.

For some of you, this article may very well bring back some rather painful memories. For others, let it be a warning…

If day trading stock online is something that you are serious about and want to succeed in, then at least show you`ve got the intelligence, emotional control and discipline to survive the bad hits as well as bagging the big profits!

There are over 10,000,000 web pages in Google dealing with courses and coaching on the subject of day trading stock online. So, before you risk another cent… do yourself (and your bank account) a favour… and start researching the mentoring options out there… until you find one that suits.

Jimmy Cox
http://www.articlesbase.com/non-fiction-articles/the-pitfalls-of-day-trading-stock-online-51721.html

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