Day Trading
Q: Can you guys over there tell this guy over here (UK) what day trading is all about? I look at your NG with fascination. Is there a website I could visit which might guide a novice through the ins and outs of day trading?
A:
Put most simply, day trading is a method of trading in stocks where
the trader never holds any stocks at the end of his or her trading day.
All stocks are sold off each day. That's how day trading is done in
its purest form. Day trading is also highly risky. Day traders fear the
downward shift in value that their stocks can take during, aft
before hours trading, so in order to avoid possible losses, they simply
sell their shares before they finish trading each day, but they also
tend to take losses that way and lose out on stocks that do well after
they sell. Day trading is widely regarded as a panacea. Most day
traders lose money. There's a saying about day trading that hits the
nail right on the head:
"Daytrading is about profiting from intra-day price trends. In order to
succeed at it, you must at least be decently capitalized, able to
recognize intraday trends and their probable limits, ready and able to
move quickly based on knowing rather than studious analyzing, and
willing to cut your losses the instant you recognize a bad situation."
How much money can be made daytrading, whether it is better to
daytrade or hold, whether daytrading is better or worse than swing
trading or playing craps, these are all topics frequently argued
about.
The fact that it is possible, and quite easy to have your lunch eaten
for you when daytrading is something that I don't recall ever having
seen argued; everybody who knows enough to discuss it seems to agree
that the hazards are real.
If you cannot recognize the actions of MM's in trading then I don't know how
you trade intra-day! When you see a trade go through at higher than the ask,
then the bid and ask both drop immediately thereafter, do you not believe
that was MM shorting? Who do you think slips little 100 share blocks
through to keep a stock trading? Are you really that much in the dark?
As to control, I have control over my reactions to the movements I see. If
I put blinders on and cannot see these movements I have no ability to
react...no control whatsoever.