Day Trading The Extreme Sport Of Investing
By Mika
The rewards are incredible for those that do it right, but for those who make enough mistakes it will take everything they have and still not be satisfied. Day trading is the practice of buying and selling and other financial options. These transactions are usually completed within the same day. Options that are typically traded include stocks, stock options and currencies. For the most part, day traders focus only on short term trading and can consist of several trades in a single day. Because of the high volume in trades day traders are given large discounts through trading brokerages.

Day trading gained momentum and notoriety during the "Tech Bubble" a period of bull market activity from 1997-2000. During this time even the most inexperienced and casual of traders were making large profits. Usually a day trader would have a certain amount of money and would basically borrow the rest on margin. During this time most day traders didn't even find it necessary to have a solid strategy. "Buy in the morning and sell in the afternoon" was the basic game plan for many. Reality hit the market in March of 2000. Since most the day traders at the time were inexperienced, they began to lose large sums of money quicker then it was gained. Most of the people relying on day trading as a source of income ended up completely broke and in some cases destitute.

Day trading is so risky that it has been likened to gambling. Compared to the number of day traders, very few are able to make consistent profits. The primary factor that contributes to such high risk is that the funds to trade are borrowed on margin. Due to this fact money management skills are a necessity. An experienced day trader knows that sometimes they can't afford to wait for the stock to rise again, if the market fails

Refinance As Low As 5.48% - Sponsored Link
Ad - www.HomeLoanTrust.com Nov 19 2008 12:45AM GMT
BPS & Nomura to Lead GRC Workshop at GARP Asia Pacific Convention
Street Insider Nov 19 2008 12:45AM GMT
Instinet Strengthens Asia-Pacific Business with New Management Structure, Key Hires
Street Insider Nov 19 2008 12:44AM GMT
BPS & Nomura to Lead GRC Workshop at GARP Asia Pacific Convention
MarketWatch Nov 19 2008 12:38AM GMT
Soros-Funded Idea Factory Becomes Obama Policy Front
BKInformation.com Nov 19 2008 12:20AM GMT
Thomas Properties wants the rest of its loan from Lehman for Austin deal
BKInformation.com Nov 19 2008 12:16AM GMT
KfW posts 1.8-billion loss related to IKB, Lehman
BKInformation.com Nov 19 2008 12:16AM GMT
Instinet Strengthens Asia-Pacific Business with New Management Structure, Key Hires
MarketWatch Nov 19 2008 12:08AM GMT
Fitch Takes Various Actions on 1 Bear Stearns Resecuritization Transaction
SmartBrief Nov 19 2008 12:07AM GMT
IMF package fails to stimulate stock trading
DAWN Group Nov 18 2008 11:55PM GMT
SEC accuses former BMO trader of inflating bank's trading portfolio
Canadian Business Magazine Nov 18 2008 11:51PM GMT
SEC charges former Bank of Montreal trader, ex-Optionable CEO
SNL Securities Nov 18 2008 11:42PM GMT
Fired Morgan Stanley Manager Sues For Age Bias
Law360 Nov 18 2008 11:42PM GMT
REFILE-BRIEF-TD Ameritrade reports October metrics
CNBC Nov 18 2008 11:41PM GMT
BP, Soros Fund invest in ethanol-making microbe
CNET News.com Nov 18 2008 10:46PM GMT
REFILE-BRIEF-TD Ameritrade reports October metrics
Interactive Investor International Nov 18 2008 10:35PM GMT
Bogle Views Paulson as Another Investment Banker
New York Times Nov 18 2008 10:34PM GMT
Discovery Labs to Present At the Lazard Healthcare Conference
Interest!ALERT Nov 18 2008 10:33PM GMT
Morgan Stanley's Banking Chief Crossing the Line
Bank Technology News Nov 18 2008 10:20PM GMT
Schwab Re-Org Combines RIAs With Retirement Biz
Registered Rep Nov 18 2008 10:13PM GMT
DemandTec to Present at the Credit Suisse 2008 Annual Technology Conference
SmartBrief Nov 18 2008 10:08PM GMT
US Sen Collins Pushes For CDS, Investment Bank Regulation
Morningstar.com Nov 18 2008 10:06PM GMT
Citigroup to cut a third of people at its investment bank?
eFinancial Careers Nov 18 2008 10:04PM GMT
Morgan Stanley Emerging Markets Domestic Debt Fund, Inc. to Host Conference Call
MarketWatch Nov 18 2008 9:26PM GMT
The Morgan Stanley High Yield Fund, Inc. Declares Monthly Income Dividend
MarketWatch Nov 18 2008 9:25PM GMT
The Morgan Stanley High Yield Fund, Inc. Declares Monthly
Business Wire via MSN Money Nov 18 2008 9:24PM GMT
The Morgan Stanley High Yield Fund, Inc. Declares Monthly Income Dividend
Stockwatch Nov 18 2008 9:22PM GMT
--> S3 Investment Company Files S-1 Registration Statement With Two-Year Audited Financial Statements
Ein News Nov 18 2008 9:07PM GMT
S3 Investment Company Files S-1 Registration Statement With Two-Year Audited Financial Statements
Ein News Nov 18 2008 9:06PM GMT
Credit Suisse Signs Global Hosting Deal
Waters Nov 18 2008 9:04PM GMT
IMMU: To Present At Lazard Capital Healthcare Conference @ 17:10 ET [delayed]
TradingMarkets Nov 18 2008 9:04PM GMT

to meet the expectations, quick thinking is needed in order to avoid higher losses. A very small percentage of those who consider themselves day traders ever actually see a profit.

The US and Exchange Commission (SEC) advises against day trading due to the fact that most individuals do not have the wealth or ability to not only make money, but to also survive the losses that most traders will face. Day Trading is not the same as investing, an inexperienced person may look at the processes and feel that it is just short term investing, but that is an incorrect view and is a leading cause of failure in day trading. Despite the promises of quick and "easy" money, day trading is a very stressful job. It requires dedication and doesn't allow for a moments rest when trading. In this field a few seconds can make all the difference. Borrowing money to buy stocks is not recommended. Persons truly interested in risky investment should do so under the guidance and assistance of trained professionals. The risk should be spread out so as to minimize losses.

Article Source: http://www.article-outlet.com/