Day Trading Business Plan Money Can T Buy Everything Essay
There's a mantra among day traders: "Plan your trade and trade your plan." First, know that you're going up against professionals whose careers revolve around trading.These people have access to the best technology and connections in the industry, so even if they fail, they're set up to succeed in the end.Set aside a surplus amount of funds you can trade with and you're prepared to lose. The process requires a trader to track the markets and spot opportunities, which can arise at any time during trading hours. Recently, it has become increasingly common to be able to trade fractional shares, so you can specify specific, smaller dollar amounts you wish to invest.That means if Apple shares are trading at 0 and you only want to buy worth, many brokers will now let you purchase one-fifth of a share.Online brokers on our list, including Tradestation, TD Ameritrade, and Interactive Brokers, have professional or advanced versions of their platforms that feature real-time streaming quotes, advanced charting tools, and the ability to enter and modify complex orders in quick succession.In addition to knowledge of basic trading procedures, day traders need to keep up on the latest stock market news and events that affect stocks—the Fed's interest rate plans, the economic outlook, etc. Make a wish list of stocks you'd like to trade and keep yourself informed about the selected companies and general markets.Many successful day traders risk less than 1% to 2% of their account per trade. You'll need to give up most of your day, in fact.
Taking advantage of small price moves can be a lucrative game — if it is played correctly.Remember that you'll have to pay taxes on any short-term gains—or any investments you hold for one year or less—at the marginal rate.The one caveat is that your losses will offset any gains.More sophisticated and experienced day traders may employ the use of options strategies to hedge their positions as well.A strategy doesn't need to win all the time to be profitable. However, they make more on their winners than they lose on their losers.Many stocks trading under a share become de-listed from major stock exchanges and are only tradable over-the-counter (OTC).Unless you see a real opportunity and have done your research, stay clear of these.As an individual investor, you may be prone to emotional and psychological biases.Professional traders are usually able to cut these out of their trading strategies, but when it's your own capital involved, it tends to be a different story.A limit order, meanwhile, guarantees the price but not the execution.Limit orders help you trade with more precision, wherein you set your price (not unrealistic but executable) for buying as well as selling.