An Informal Introduction To Day Trading – 1

Those who have spend their time in front of their trading terminals know one thing for certain. Almost everyday, incredible money making opportunities occur in the stock markets all over the globe. The prices may go up or down, but there is always money to make if you are in that trade. Certain traders regularly make large amounts of money trading these markets. They will only place low risk but high probability trades.

Have you ever wondered who in fact pays for the success of these market players? All the others who enter the market without doing his or her share of research work. In simple terms, there are some traders who make copious amounts of profits at the expense of the other market participants.

Throughout every trading session, every markets will do certain predefined things. For no apparent reason whatsoever, the price might break up or break down. Most of the beginners might not even get a chance to place their trades, even when they were certain that the prices would rise or fall.

There is one thing that I have learned throughout these years. The more you tend to complicate day trading, the tougher it is going to become. Avoid holding on to the belief system that you need a full fledged high priced charting software and access to the latest indicators to make money in the markets. In fact, some of the best traders that I have known do not rely on any kind of indicators or mystical angles.

Every stock has four aspects that you will have to focus upon. They are the (a) Opening Price (b) High Price (c) Low Price and (d) Closing Price. Every day, the stock will open at a certain price and it will either move up or down (creating the high and low price in this process) only to settle at a particular closing price towards the end of the trading session.

All you have to or need to do is to focus on these four parameters to achieve trading profits consistently. Yes, it is that simple. We human beings think that it cannot be that simple. But, let me tell you – it is that simple. Trading will be more profitable if you are willing to leave your brains at the door.

If you ask me, online day trading is the safest form of investment. The longer your money stays in the stock markets, the riskier it has become. While day trading, you will know whether you are in losses or profits at the end of the day.Since the market has to close at the end of the day, your losses will also be less.

Buying and holding is a mantra that used to work beautifully in the past. Today, people buy and hope because high frequency trading machines have taken over the arena. It is of no wonder that the prices of stocks surge up or down 100s of points within seconds. In such a scenario, conventional investing doesn’t help at all.


About Praveen Pious Francis
A part-time blogger who has a wide range of interests including investing in the stock markets across the globe and broadband technologies in India.

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