Day Trader’s FAQs
- How much profit can I make day trading?
- How long will it take me to learn how to day trade?
- Is my day trading capital guaranteed from loss?
- Do you recommend stocks, futures, or currencies?
- Should I quit my day job or business to day trade?
- Can I day trade if I live outside of the United States?
- Do I have to pay taxes in day trading?
- I heard that day trading currencies has more tax benefits than day trading stocks. Is this true?
- Can I open a trading account from any country?
- How long should I do paper trading before day trading with real money?
- What is the minimum account you recommend to start day trading?
- Should I day trade with all my money?
- Can I day trade using an Apple Macintosh?
- How much will it cost for me to learn day trading?
- Should I trade from home or from a trading room?
- What type of computer do I need for day trading?
- Is day trading with a laptop better than with a desktop?
- Do I need more than one monitor?
- Do I need DSL or Cable Modem service?
- What is the best day trading strategy?
- Where can I open a day trading account?
- Can day trading be treated as a career?
- Is there a “best time of the day to day trade?”
- How much capital do I need to day trade?
- Should I paper trade on paper?
- What can a day trading software cost me?
- Is it a good idea use trading systems or daytrading entry/exit point generated by trading systems/ websites?
- I am ready to start day trading. What is the first step I should take?
- I have invested in stocks in the past. Will day trading be easier for me to learn?
- Should I pay thousands of dollars for a day trading course?
- How can I predict what prices are going to do while day trading?
- Can I day trade only a few hours a day?
- Why all the fuss about having a day trading strategy?
- What is the best day trading software?
- Is day trading online safe?
- Any good day trading books out there?
- Do you have any good day trading tips?
- What is the best way to learn day trading?
- Where can I find any day trading secrets?
- Are there day trading techniques that are easy to use and effective?
- Is day trading for beginners?
- Where can I find a good day trading company?
- Should I use news to day trade?
|How much profit can I make day trading?|
This is a very common question among novice traders. It is really impossible to answer because it varies so drastically from individual to individual. Imagine if you were the coach of a new, professional basketball team and you were given the authority to recruit all the players under one condition. If you answered the “simple” question, “How many points is each player going to score a game?” Not only is this question impossible to answer in basketball, it is even more difficult to answer when it comes to day trading because novice traders do not have any prior experience. A new trader can become a huge success by applying to perfection a system he is taught or by even developing his own winning, trading system. A novice trader can also fail miserably for many reasons, not just because of a lack of discipline. There are so many physical, psychological, and emotional variables involved that it is really futile to try to determine how profitable a new trader will be. Nevertheless, human beings don’t like uncertainty. They want a daily percentage, a monthly dollar figure, something they can visualize and project to infinity. Unfortunately, this is not reality. If done correctly, day trading can become one of the most lucrative businesses in the world, but no one could answer for sure how profitable anyone could become.
|How long will it take me to learn how to day trade?|
This depends on the amount of time you put in studying the markets and practicing daytrading. This also depends on individual skill, interest and the tools that are used to learn daytrading. For example trading simulators like RapidSP can make the learning curve shorter while practicing at market speed might take you longer to learn to daytrade.
|Is my day trading capital guaranteed from loss?|
Wouldn’t it be nice if we could lose all our money day trading and then have some organization giving it all back to us? Could you imagine? We enjoy all the fruits and someone else takes all the risk. Nice, right? Not even in fairy tales does that happen. No broker or expert can guarantee that you won’t lose your money when day trading. Remember, if you want to become a day trader, you will have to call the shots. You will make the decision to buy and sell. You are in control of your own destiny and responsible for your own losses and gains. If anyone guarantees that you will make money day trading, they are lying to you. Do you know for sure if you will make money when you start a new business? Day trading is a business like any other. There are no guarantees. Nevertheless, because businesses cannot be guaranteed does not mean that they shouldn’t be started.
|Do you recommend stocks, futures, or currencies?|
For day trading, we strongly recommend currencies. It is just so much simpler to day trade a handful of currencies than a plethora of stocks. The systems to trade currencies are a lot easier to use as well.
|Should I quit my day job or business to day trade?|
No! Wisdom is a necessity in the business world. Before a drastic financial move is made, a lot of planning is required; that is, if we care about the final outcome. Day trading is not for everybody, just like brain surgery is not something everyone could stomach. Before you sell the house, wife, and kids and take an eternal day trading sabbatical, make sure you first start small and slow. You don’t have to quit your job or close your business and dedicate yourself fully to the world of day trading. In fact, since the general public now has access to the 24-hour currency market, new traders can day trade during convenient hours, based on their schedule (without having to quit their jobs). Don’t get greedy or anxious about it. Test the waters before you jump in. Then you will know if a career in day trading is for you.
|Can I day trade if I live outside of the United States?|
Yes. In fact, the Unites States has many laws that offer incentives to foreign investors. All you need to start day trading is a computer and an Internet connection. Through the Internet, you could trade from any part of the world. That is one of the greatest advantages of having a day trading business. No matter where you are or where you go, as long as you have access to the web, you can run your business. What we do recommend is that you try to trade through a broadband (DSL or Cable Modem) connection rather than through a dial-up connection (56Kbps), no matter which country you are trading from.
|Do I have to pay taxes in day trading?|
It depends. If you are a citizen or resident of the United States, you do have to pay income taxes on your day trading profits. There is really no way around this. The amount of taxes you pay might vary if you trade under your own name or under the name of a business entity (consult a tax professional if you are considering setting up a business for trading purposes). On the other hand, if you are a foreigner (non-U.S. resident) you can trade without paying any taxes to the United States government. That is one of the greatest incentives that the United States offers foreign stock, futures, and currency investors.
|I heard that day trading currencies has more tax benefits than day trading stocks. Is this true?|
This is true when it comes to residents or citizens of the United States (please ignore this information if you are a foreigner). Currency day traders have a tax advantage over stock traders. Sixty percent (60%) of the capital gains from trading currencies are taxed at the lower long-term capital gains tax and only 40% of the profits is taxed at the higher short- term rate. On the other hand, all of a stock day trader’s profits are considered short-term and are taxed at the higher short-term rates. In other words, stock traders do not enjoy the favorable 60/40 split that currency traders have when it comes to taxes.
|Can I open a trading account from any country?|
Residents or citizens from most non-US countries can open day trading accounts. Due to the US Patriot Act, customers from some countries won’t be able to open accounts in the United States. Traders in the following list of countries are unable to open accounts in the US: Afghanistan, Burma (Myanmar), Cuba, Iran, Iraq, Libya, North Korea, Sudan, Syria, Unita (Angola) and Western Balkans. Unless you live in one of the prohibited countries as per the Patriot Act, you will not have a problem opening and account in the US to day trade.
|How long should I do paper trading before day trading with real money?|
This depends on how fast a trader could learn and implement the trading strategies. The correct answer to this question is, “When the day trader feels comfortable.” We have seen people paper trade for months before day trading with real money. There have been others that have only paper traded a few short weeks. It all depends on the individual student. Paper trading is an essential step in a day trader’s education and cannot be skipped. To learn how to trade correctly, the student needs to practice on a trading simulator. Though majority of trading practice should be done on faster-than-market simulators for obvious reasons, many forex trading firms now offer free demos of their trading platforms. These are a great learning tool for serious up-and-coming day traders.
|What is the minimum account you recommend to start day trading?|
Before I even answer this question, please note that day trading should not be carried out with scared money. Scared money is money that a trader cannot lose because it is needed for something else; for example, money needed to pay the rent, money needed to feed the family, money needed to pay the bills, cash advances from credit cards, money obtained from loans, etc. Day trading should be done with risk capital; money that can be lost without permanently altering the financial condition of an individual and/or his loved ones.
There are two types of people that ask the “minimum account” question. The first type does so because they have very little capital at their disposal; the second type because they don’t understand the business of day trading well and want to start with the smallest possible amount for fear of losing it all. Both of these types of people are mislead. The first type should not be trading in the first place. As we mentioned before: trading is for money that you can AFFORD to risk. If you have very little money to your name, you should not be risking the little you have in day trading. Despite the fact that currencies can be traded using a mini account with only a few hundred dollars, I don’t recommend for anyone to do this if they can’t afford to lose the money. Understand the reason why I say this; it is not because day trading is a guaranteed way to lose, but because a person cannot perform at an optimum level with the dreadful thought of losing in the back of their minds.
The second type of person might actually be taking more risk by day trading with the minimum amount required by the broker rather than the proper amount he NEEDS to trade with. “Wait a minute”, you might say; “Did I hear you correctly? If you day trade with less, you are taking more risk?” Listen to me for a minute. When day trading, you cannot risk too much on any single trade. In order to do this you need to be able to use only a portion of the trading capital in your account. If you hardly have any money in your account, how can you divide the money properly to properly size your positions? You can’t!!! It is better to deposit $15,000 in an account and risk $300 than risking the same amount using a $2,000 account. If you learn good trading strategies and become disciplined in applying them, it shouldn’t matter how much money you open an account with.
|Should I day trade with all my money?|
Let me answer your question with another question. Should you bet the house on one spin of the roulette table in Vegas? Not a chance! The attractiveness of day trading lures many inexperienced investors that risk too much of what they have in the day trading arena. This is a big mistake. In general, an investor should not day trade with more than 25% of his entire net worth (preferably, not more than 25% of his liquid net worth; stocks, bonds, CD’s, bank accounts, cash, etc.). You might ask, “Does that mean that I cannot day trade unless my liquid net worth is $100,000 or more?” The answer is, “Only if you want to day trade stocks.” Remember that to day trade stocks you need at least $25,000 in your trading account by law (preferably $30,000 to give you some margin for error). So if we use the 25% limitation figure above, you need to have at least $100,000 to be able to day trade stocks with $25,000. In my opinion, nowadays there are better things to day trade than stocks. “Like what?”, you ask. Like currencies (foreign exchange, or forex). Currency daytrading rovides many advantages that you can read about in this website, including being able to use very little money to start out. You can open a mini forex account with as little as $250. This means that pretty much anyone can give day trading a shot without betting the house. Rather than risking the only $25,000 you may have to day trade stocks, you can open a mini account. with a few hundred bucks and begin your day trading career.
|Can I day trade using an Apple Macintosh?|
Unfortunately, most good trading software is not written for Macs including RapidSP trading simulator.You need a Windows-based PC. While Macs may have many advantages for graphic design, trading software is just not written Apple. If you are serious about day trading, we suggest that you get a Windows computer. There are supposed to be software programs out there that allow Mac users to be able to run Windows programs on their apple computers. I do not have any experience with them, so I cannot recommend any of them. I believe that Microsoft has a program called Virtual PC that can be installed on the Mac operating system to create an emulated Windows- compatible computer.
|How much will it cost for me to learn day trading?|
As much as you want to spend, really! There are many educational “professionals” and companies in the market that charge thousands of dollars for education or for”magical” software that is supposed to give you the “secrets” of trading. We recommend you read as many articles as possible on this website. That will give you enough information to judge different tools properly.
|Should I trade from home or from a trading room?|
Please be careful with trading rooms. Even though it does feel good to trade with someone or a group of people side by side, this is not always a good thing. Many trading rooms charge a sit fee for the use of their trading stations and also make commissions from their day traders. These firms typically train customers to generate lots of trades with their “proprietary” strategies or techniques. Be very, very careful. When you trade with other people, there is also a tendency for a group to follow one or two day traders. This prevents an individual day trader from reaching the level of independence that he or she needs to trade successfully. Even though it might be difficult at the beginning to trade from home, we suggest that you stick with it. Get the proper day trading education and paper trade enough until you feel comfortable to trade live from home.
|What type of computer do I need for day trading?|
Please check our article ‘Equipment need for daytrading’. It has all the information you need.
|Is day trading with a laptop better than with a desktop?|
Not really. Even though most laptops nowadays come with a video card that allows you to connect an extra monitor on the back, it is kind of awkward to be looking at the laptop screen and at a bigger screen beside it. If you already have a pretty modern laptop and you don’t want to spend extra money on a day trading desktop computer, then something is better than nothing. At least get a separate monitor and connect it to the appropriate port on the back of the laptop. If you want to get a laptop regardless, make sure that the video card that it brings allows you to connect an extra monitor to one of the video ports. Try to get a laptop with as much RAM as possible (greater than 512 MB if possible).
|Do I need more than one monitor?|
No, but multiple monitors will make your day trading job a lot easier. If you are day trading stocks using a direct access broker and level II software, you will need at least two monitors – possibly even three. When you are trading currencies, on the other hand, you might get away with just one; possibly a 19″ LCD (flat screen) or greater. The reason for this is that currencies are a lot simpler to trade, since you only have a few major currencies to deal with. The software for currency day trading is also a lot simpler than that for stocks. This makes it a lot easier on the budgets of day trader that don’t have too much starting capital to begin with.
|Do I need DSL or Cable Modem service?|
Stock trading software requires a lot of data and statistics to be constantly delivered to your trading computer via the Internet. Consequently, you are better off getting broadband Internet service (DSL or Cable Modem) if you are planning to trade stocks. When the market is very active, stock day traders with a 56K connection typically experience data delays, where the data being displayed on their computer screens lags the actual market data. Not a very pleasant thing to experience. Even though currency trading software will also work better over a high-speed connection, since not much data is being transmitted you can probably get away with a regular 56K connection.
|What is the best day trading strategy?|
Please read the daytrading articles on this site. There is a lot of good information in them.
|Where can I open a day trading account?|
You can open a stock day trading account with any direct access broker. Also check this website for some recommendations.
|Can day trading be treated as a career?|
Off course. If you obtain the appropriate daytrading education and practice on a daytrading simulator such as RapidSP enough, you can treat day trading as a career. We am not suggesting that you leave your regular job or career to start day trading right away. Start slow. There is no need to rush into anything. Rather than risking everything by assuming that you are definitely going to be a successful day trader, you could open a day trading account while you remain at your current job or profession and see how it goes. You don’t really need much money nowadays to start day trading if you are willing to trade the largest financial market in the world: forex or foreign exchange. You can daytrade currencies by opening a forex account with as little as $250. This is a great way to test the waters before jumping in. On the other hand, if you want to day trade stocks instead, then you realistically need to start out with at least $30,000. This high starting capital requirement buts stocks out of the reach of most small traders. Besides, day trading currencies (as you will read on this site) offer many more advantages than stocks. So before you leave your old job and start your new day trading job, be like the turtle – slowly but surely wins the race.
|Is there a “best time of the day to day trade?”|
Even though there is not “a best time” of the day to trade, there are certain hours that provide greater opportunities for a day trader. In the stock market in the United States, these hours are somewhat limited. The stock market officially opens at 9:30 AM EST and closes at 4:00 PM EST. The prime time day trading hours for stocks are between 10:00 AM and 12:00 PM and between 2:00 PM to 3:30 PM. When the stock market opens at 9:30 AM, there is a lot of volatility during the first half hour of trading and it become difficult to determine the general direction the stocks are moving. At around 10 AM, when the dust begins to settle, there is usually a better indication of the morning trend of stocks in general. Between 12 PM and 2 PM EST, many traders and other market participants are out to lunch and trading slows down quite a bit. Consequently, it is usually a good idea not to initiate new stock trades during this time. Around 2 PM EST, trading activity starts picking up again and builds up until the close. During the last half hour of “official” trading, the market might get chaotic again, so (in general) it is not a good idea to get into new trades during this time. Even though some people will argue that it is possible to day trade in the pre-market and after-hours trading sessions, the lower liquidity makes it ill advised to attempt to day trade.
Since foreign exchange is a much bigger market than stocks and trading goes on 24 hours-a-day, there are many more opportunities throughout the day to day trade. Depending on what time zone a day trader lives in, he may choose one or various ranges of hours during the day to execute his trades. Since during the hours when the European financial markets are open (around 2AM EST to 11 AM EST) there is a lot of currency trading activity, this can be a perfect time to day trade. Day traders in the United States who are in Pacific Time can take advantage of these trading hours (as well as Europeans and traders from other countries in a similar time zone). The U.S. financial markets start around 8AM EST and the stock market officially closes at 4 PM EST. Consequently, during these times the forex market is very liquid. In general, from about 8 AM EST to about 2 PM day trading can also be successfully carried out. Finally, at around 7PM EST the Asian markets open and activity on the USD/JPY currency pair begins to pick up. This can be a great opportunity for a person who has a day job to give day trading a try. In general, the only times that new day trading positions shouldn’t be initiated in the currency market are between 2 PM to 6 PM EST. The reason for this is that the US market is about to close (so forex trading activity slows down) and no major financial market in the world is open.
|How much capital do I need to day trade?|
This depends on what you want to day trade. Despite all of the disadvantages, some people want to day trade stocks. Due to restrictive regulations, stock day trading requires an account size of at least $25,000. In reality, you need at least $30,000 to day trade stocks (preferably more). To day trade currencies, you can start with as little as a few hundred bucks. This has only been possible since the late nineties, when the foreign exchange market was opened to the individual (retail) investor. For new day traders that only have a few hundred dollars to risk in day trading, a forex account is a great option. If you want to learn more about day trading currencies, go to the currency trading section of this website.
|Should I paper trade on paper?|
No! Paper trading should be made as realistic as possible without the use of real money. Paper trading by writing down the prices you would have bought or sold is not the same as using a day trading simulator that uses actual market prices and lifelike executions. A day trader’s learning curve improves immensely when he uses a lifelike software program that does not use real money.
|What can a day trading software cost me?|
The price of day trading software can vary greatly. Make sure that the software that you use for day trading provides charting as well as order execution build into the platform. RapidSP trading simulator includes both of these features.
|Is it a good idea use trading systems or daytrading entry/exit point generated by trading systems/ websites?|
Let me answer a question with a question. Do you want to learn how to become a day trader or do you want to be an order taker? When you rely on entry and exit signals from a program or a company, you are simply taking orders – you are not learning how to determine where to get in and where to get out yourself. You are not evolving as a trader. Why do people so desperately look for trading signals then? Because they want to have their cake and eat it too. Many of these signal lovers want to be told what to do, but also want to feel in control. Placing the orders makes them feel like traders, but the day trading signals give them a fake sense of security – since they are acting on “professional” or “privileged” information. When you are day trading, you need to react on information in an instant. When you are waiting for a signal before buying or selling, there is a reaction delay that can cause you to leave some money on the table. Furthermore, if the daytrading signals you are relying on are so great, why doesn’t the company that sells them to you offer them as an automated package? Why would the signal company reduce the effectiveness of the signals by allowing you to press the trigger and possibly mess everything up? It’s silly. Don’t rely on signals for daytrading. Learn how to trade. There is no other way.
|I am ready to start day trading. What is the first step I should take?|
Please read the article ‘6 steps to profitable daytrading’ on this website.
|I have invested in stocks in the past. Will day trading be easier for me to learn?|
Will day trading be easier for me to learn? Probably. If you are already familiar with the types of orders used to buy and sell stocks (market, limit and stop order) and basic concepts like bid and ask, you can jump right into other more advanced day trading concepts. Given the fact that trading currencies is a lot simpler than trading stocks stocks (since there are only a handful of currencies to trade), a stock investor can quickly make the transition from equities to forex. Now, don’t misinterpret what we are saying here. You don’t have to be an expert in any type of market to learn how to day trade. We believe that with dedication and practice anyone can learn day trading.
|Should I pay thousands of dollars for a day trading course?|
NO! There are a lot of so-called “professional traders” out there that want you to fork over thousands of dollars for a course or seminar that will teach you the “secrets” of day trading. Don’t fall victim to this scam. You can learn a lot more about day trading from this site for free than many of these “experts” put together. Don’t be fooled by a couple of testimonials or infomercials on late night TV. The Unites States is the exaggerated advertising capital of the world. Only in the U.S. can you make outrageous, unverified claims such as, “we make the best this,” “our superior quality is unequaled,” “we leave our competition in the dust,” …. What a bunch of baloney! Haven’t you realized that when you don’t know much about a particular subject, everything sounds good? This is true in the field of finance, medicine, law – you name it. Don’t go by appearances. Save all of the thousands of dollars that you are going to spend for a “magical” trading course and open your check out the articles on this website and the free RapidSP daytrading simulator. The trading experience you will obtain will be priceless.
|How can I predict what prices are going to do while day trading?|
All human beings have a desire to know the future even though this is an impossible feat. Deep inside people know that they can’t know the future – but yet they have a burning desire to know what lies ahead. This is a paradox and is why so many people get ripped off by psychic hotlines, palm readers and new age religions. Because of man’s inability to predict the future, day trading is not predictive; it is reactive in nature. The day trader’s job is to react to what prices are doing instead of predicting what prices will to do. Predicting is a futile activity. No one has a crystal ball in day trading (if you do, please let me know). Despite this fact, people never give up trying to determine where prices are going. This becomes evident many times when someone is just starting to day trade. When it is time to press the button to buy or sell, the novice might hesitate – wondering he is doing the correct thing at the correct time; if the second after the order is submitted, the price will go in the desired direction. If this is your problem, don’t worry about it. You will be on your way to becoming a successful trader when you can send the order without thinking about this nonsense; when you realize that winning and losing is part of day trading and that you will never know which one will come first.
|Can I day trade only a few hours a day?|
Yes. Off course, the more time you spend day trading the better (especially at the beginning) – but you don’t have to be glued to your computer 24-hours a day. If you are only going to trade a few hours a day and you want to trade stocks, you will need to be there from 9 AM EST to 12 PM EST. These hours are prime time hours for stock day traders. If you want to trade currencies you will have a lot more flexibility. Unlike the stock market, the forex market is opened 24 hours a day for most of the week. This means that a currency day trader will have different trading hours to choose from depending on his availability. After 1 AM EST, the European financial markets start showing activity and so does the currency market. During this time, currencies can be traded just like stocks are during the first few hours after the stock market opens. These early morning hours are great for U.S. day traders in Pacific Time (in places like California) or for Europeans. Currencies can also be traded during the hours of the day when the US stock market are opened as well as when the Asian market opens in the late hours of the afternoon (when the US stock market is closed). After the Asian market, the European markets start kicking again and this round-the-clock process continues day after day. Learn more about currencies in the currency trading section of this site.
|Why all the fuss about having a day trading strategy?|
Can I simply trade by feel? Yes and no. No if your ‘feel’ is not developed enough. Yes if you have developed a ‘feel’. What does it mean? It means experience. Develop enough skill with a simulator such as RapidSP and your hunches and guesses will more accurate.
|What is the best day trading software?|
It depends. Till now we haven’t come across any day trading simulator that will come close to the RapidSP daytrading simulator in sophistication and ease of use. You will be able to practice your trading with the actual forex tick-data and place life-like simulated trades in the platform. It is super cool and a great learning tool.
|Is day trading online safe?>|
From a technology point of view, trading online is very safe. The online trading systems in place today have robust security features that make them ultra secure. You do not have to worry about somebody breaking in your account and running away with all your money. Technology aside, day trading online can become very dangerous for people that are not properly prepared.
So how can you prepare yourself to make online day trading safer? Education and practice are the key. In today’s society, new traders often times mistake the ease of opening an account and placing an order to buy or sell with the difficulty of day trading profitably. Day trading is no joke. You need to learn how the market you are trading works and understand the basics like interpreting quotations and charts; whether you are trading stocks, currencies or futures.
|Any good day trading books out there?|
Please check the list of our recommended books in this website.
|Do you have any good day trading tips?|
Sure. Please read the day trading articles posted on this site. Some of them discuss different strategies you can use to buy and sell. You can try many of these with the RapidSP daytrading simulator and keep what works out for you.
|What is the best way to learn day trading?|
We are human beings. We are always looking for the shortcut to everything. Every time someone promises us a get rich quick idea, we are always tempted to try it. This is what is happing right now with many of the companies and individuals that sell educational material (seminars, software packages, recommendation services, etc.) – they promise that you will learn day trading quickly with their products. Don’t be fooled! If you want to learn how to day trade, you need to go step by step – don’t rush into anything. First you need to learn the basics of trading. By reading the free information on this day trading website carefully, you will accomplish this. Before you start day trading, you need to learn a specific trading technique that you can follow. Even though there are many day trading strategies that you can learn, you need to pick one (or else you will suffer from paralysis by analysis). After that, practice like crazy on a daytrading simulator and then open your day trading account to trade live. Please read the ‘6 steps to profitable daytrading’ article on this site.
|Where can I find any day trading secrets?|
Please check the daytrading articles posted on this site. Few of them discuss techniques used by some of the most well known traders.
|Are there day trading techniques that are easy to use and effective?|
Yes. Please check the daytrading articles posted on this site.
|Is day trading for beginners?|
Yes. You cannot learn how to day trade unless you start somehow. When you start, you will be a beginner. In the beginning stage, there are many things that you have to beware of. One is the desire to try everything you hear from all of the so-called “experts” on TV or print publications. When you don’t know about something, everything you hear about it sounds good, doesn’t it? You cannot fall into this trap. There is nothing magic about day trading. For beginners to learn how to do it, they must get the proper education and practice like hell. People will claim to have a magical software that will give you the answers or the seminar that will make you all knowledgeable about daytrading.
In our opinion, there are few things for a day trading beginner that are more beneficial than reading through our free site and using the RapidSP daytrading simulator. This site was designed to demystify the world of trading; to cut through all the BS that the media and many “professionals” are now polluting the world with. Try our RapidSP daytrading simulator for free and find out how it can make your daytrading learning process simple.
|Where can I find a good day trading company?|
I assume that by this you mean a company where you can physically go to day trade. These day trading companies or “trading rooms” have a number of computer stations set up so that people can go and day trade. These are usually brokerage firms that charge clients a seat fee per month for the use of the computer as well as a commission for trading. This arrangement is more common in the stock trading arena than for forex or futures. The trading company might also charge clients for a training seminar or education.
A word of caution about these day trading companies; since the owners of the trading room are making commissions off their traders, they usually try to get them to trade more frequently. This motivation to overtrade is instilled in the day traders via the strategies taught in their educational program and by the commotion going on in the trading room. This can be severely detrimental to the trader and his account. Even though some people find it boring to trade alone, often times it is better to do so than to give in to the constant urge to trade because you are in an environment that promotes it. Instead of spending a lot of money to trade from a day trading company, start slow. Read through this site, try out a the RapidSP daytrading simulator. Read our ‘6 steps to profitable daytrading’ article.
|Should I use news to day trade?|
When important financial news is released, usually the prices of financial commodities (stocks, bonds, currencies, etc.) start fluctuating more than they normally do. This increase in volatility makes it more difficult to day trade – since prices move more chaotically and stops are taken out more easily. For that reason, it is usually better to avoid taking a position right before or during an important news or economic release. What you should try to avoid is the urge to buy or sell based on your interpretation of the news. Just because you think a specific news or event is positive for the price of a stock or currency, it doesn’t mean that the price will go up. If the news is significant, the price will go up or down – it doesn’t matter which way it goes. You can react to whatever direction it decides to head in.
Day trading is not about PREDICTING where the price should go based on the news. Day trading is about REACTING to what the price eventually does. Traders that try to be smarter than the market by predicting eventually get eaten alive. Since nobody has a crystal ball, don’t day trade based on news.