Stock Market Day Trading
You might be wondering how exactly day trading content found its way onto JobMonkey. It’s pretty simple: day trading is a way to make money (albeit a risky way) working from home – or really anywhere in the world – provided you have access to a computer and Internet connection. Day traders work when they want and are their own bosses. So there are some reasons why we make this information, and the Forex trading content, available to our visitors.
Even if you don’t have an MBA, or if you lack the financial experience of an investment banker, you are probably still aware of some of the main aspects of trading stocks and other financial instruments. Maybe you’ve heard of day trading stocks, bonds and futures?
In simplest terms, trading is the buying and selling of financial instruments (stocks, futures, options, currencies) with the intention of making a profit. For most Americans with monetary interests in the financial markets, the responsibility of executing trades and maintaining trading accounts is done with the intention of providing for their future. Also, many of these individuals look to financial professionals to watch the financial markets and invest their money in wise and safe ventures.
However, there is another form of stock trading that garnered national attention in the 1980s: Day Trading. Beginning in 1971 with the birth of the computerized, over-the-counter NASD (National Association of Securities Dealers), the role of computers in stock trading began to take form. And, with the introduction of the SOES (Small Order Execution System) in 1985, also relying on computer technology, traders were able to bypass the time-consuming, and sometimes burdensome, process of executing trades by phone, and began executing quick trades via the relatively new invention dubbed the internet. A large pool of investors took the advantages the SOES offered in an effort to maximize trading profits using rapid transaction, and so day trading as seen today was born.
Day trading is a unique approach to playing the stock market. Day trading is the act of buying and selling securities within a single trading day.
Day traders buy and sell stocks over the course of each day with the hope that the stock’s price will rise or fall in value in a short period of time, ensuring the trader a quick profit. The key word in the previous sentence is “quick.” Unlike trading stocks and other securities, day trading is done at a much faster pace. Most investors purchase a stock for an extended period of time. Day traders are not investors though, they are as their name states – traders who play the stock market each day; that is, they do not invest time in holding stocks for future profit. Day traders hold a stock for less than one day, and in some cases, for only a few seconds. The securities traded by day traders can include stocks, futures, options, and foreign currencies. Day traders, since they are in business for themselves, are typically well educated in the areas of investing and economics. Also, since day trading requires the ability to incur some losses, day traders are usually well funded, either by their own capital or that of a sponsor.
In this section of JobMonkey you’ll learn the basics of day trading. We cover topics such as:
- Scalp trading
- Range and swing trading methods
- Counter trading the market
- How breakout trading works
- Stock market analysis
- Reading stock market charts
- The risks of day trading
- How to become a day trader
- and More!
Two Types of Day Traders
Institutional Day Trader
An institutional day trader is a trader who works for a financial institution. These traders have several advantages working for a financial institution, including access to more resources, trading tools, larger accounts (they are usually trader with the institutions money), state of the art trading and analytical software, and support teams. In the end though, they still have a boss, and they don’t get to keep a majority of their returns for themselves.
Retail Day Trader
A retail day trader works for himself. Retail day traders (who we will simply refer to from here on out as day traders) trade with their own money. Most day traders use brokers (direct-access brokers are very common today) to facilitate trades for them, and almost all day traders rely on online trading software for their business.
Due to the technological advancements over the past 2 decades, retail trading has seen a serious boom in the industry. Day traders now have access to an almost unlimited number of web resources, including news sources and day trading platforms.