What Is A Day Trader? Beginner Video on Day Trading
What is a day trader? Sign up for our free 5 day video boot camp to learn how to trade:
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This question is one that I get on an everyday basis from people that want to learn more about the stock market.
What is a day trader?
A day trader is someone that buys and sells any financial instrument (futures, stocks, options, currency) and does not want to hold them like an investor or swing trader. They pretty much want to be in and out of them in hours most of the time minutes. Take me for instance. The longest trade I've ever held is less than 1 hour. If I remember correctly it was under 45 minutes. Today I had one that lasted around 25-30 minutes.
The second most question I'm asked is what does it mean to go long or short? A long is the same thing as buying meaning that your you are gambling that the current price in the market will go higher. So you are betting that price goes up and you win if it in fact does go up and then you close your position.
A short is just the opposite. In this case you are betting on the fact that price is going to go down. So you sell short and plan on closing your position once price goes lower.
Let me show you a quick example of what I mean.
Finally the last question that I am most commonly asked is how much can I stand to lose if I day trade? And the answer is actually kind of vague and that is .. it just depends.
So, let me explain exactly what I mean by that. Anytime you should take a trade you should automatically have a plan when you enter that trade. In fact I'm going to go a step further and say that your stop management should be in place already when you take a trade. So, If i go short and take a trade my stop management should automatically pop up. And under no circumstances should I ever move my order.
That's the problem with most traders. They take a trade and have no plan. So, if the trade begins to fail they sit there and hope that it eventually will turn back in the original direction that they wanted it to go. And the opposite holds true for when they take a trade and it begins working in their favor.
They will sit there and get greedy and try and let the trade run. And once it turns against their favor they'll sit there and be disgusted with themselves for not closing the trade when they had a huge profit.
Bottom line is have a plan when you take any type of trade.
This should answer the question of what is a day trader.
What is a day trader? Sign up for our free 5 day video boot camp to learn how to trade:
http://daytradervideo.com
This question is one that I get on an everyday basis from people that want to learn more about the stock market.
What is a day trader?
A day trader is someone that buys and sells any financial instrument (futures, stocks, options, currency) and does not want to hold them like an investor or swing trader. They pretty much want to be in and out of them in hours most of the time minutes. Take me for instance. The longest trade I’ve ever held is less than 1 hour. If I remember correctly it was under 45 minutes. Today I had one that lasted around 25-30 minutes.
The second most question I’m asked is what does it mean to go long or short? A long is the same thing as buying meaning that your you are gambling that the current price in the market will go higher. So you are betting that price goes up and you win if it in fact does go up and then you close your position.
A short is just the opposite. In this case you are betting on the fact that price is going to go down. So you sell short and plan on closing your position once price goes lower.
Let me show you a quick example of what I mean.
Finally the last question that I am most commonly asked is how much can I stand to lose if I day trade? And the answer is actually kind of vague and that is .. it just depends.
So, let me explain exactly what I mean by that. Anytime you should take a trade you should automatically have a plan when you enter that trade. In fact I’m going to go a step further and say that your stop management should be in place already when you take a trade. So, If i go short and take a trade my stop management should automatically pop up. And under no circumstances should I ever move my order.
That’s the problem with most traders. They take a trade and have no plan. So, if the trade begins to fail they sit there and hope that it eventually will turn back in the original direction that they wanted it to go. And the opposite holds true for when they take a trade and it begins working in their favor.
They will sit there and get greedy and try and let the trade run. And once it turns against their favor they’ll sit there and be disgusted with themselves for not closing the trade when they had a huge profit.
Bottom line is have a plan when you take any type of trade.
This should answer the question of what is a day trader.
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