Dispelling the Myths of day trading | Finance information

As a trader

that Utilizes both short-term and day-trading strategies, I have been given a unique insight into the true benefits and Disadvantages of both. As a teacher of trading, I have also had the opportunity to hear many expressions often quoted in regard to trading that are FIRMLY believed, but simply not hold up under scrutiny Thurs. Many of these center on the subject of day-trading. If you are interested in day-trading, then it behooves you to know what is true and what is not

Myth 1 -. Day-trading is risky, much more than short-term trading or investing. ? / p> Without doubt, the risk is greater for short-term trading. In any single trade you are risking far less in a day-trade in ether than a short-term trade or long-term investment. What gives the appearance of greater risk is that you are taking Typically more trades. Even on my worse day I have never lost as much as I have short-term trading. Yes, that is right. Even on my worse day combining all of those trades day I still have not matched with what I have lost some of my short-term trades even though they are just one single trade. My own experience demonstrate that short-term trading trates and riskier than investing often Proves day-trading. Surprised? You should not be, it is a matter of common sense. How much do you risk on a day trade as opposed to a short term trade? If a short-term trade has so much potential of a greater loss than any day trade what is naturally going to be the outcome when trades go bad

Myth 2 ? Day-trading is gambling

Any trading is gambling if you trade without a plan or allow emotion to control your decisions. The key difference is putting Whether you are the odds in your favor or not. If you are doing so then the trading, Whether you are talking about short-term, investing, or day-trading, becomes a business. If you can not put the odds in your favor then all of them can be Considered gambling. None have an advantage over another

Myth 3 -. Day-trading ties you to a computer all day

I have to laugh at this myth. My typical day is an hour and a half in the morning and two hours in the afternoon, with a two hour lunch break. Even when I am trading I do not watch the market all the time because I am waiting for set ups to develop, so often I am playing a game on the computer or watching television while waiting. There are times when a limited market trends during the day, the most profitable times to trade. Most of the time it just Consolidates. During these down times when the market is in consolidation there is no need to watch the markets like a hawk. There are very simple ways to alert you when it is time to prepare for a trade. Frequent breaks should be the norm, not the rarity. I do not know of any other career that can pay you as much and yet give you so much free time

Myth 4 -. Day-trading is too stressful

Any trading is stressful if you are losing money, just as any trading is easy if you are making lots of profit. It is not the type of trading, but not how well you adapt to it and Whether you are successful or. The stress of day-trading Typically results from two things; poor trading and the inability to emotionally adjust to the pace fast. Day-trading requires much faster responses because they are made in real time. There is not much time to analyze and then reanalyze the situation before making a decision like a person might do with a short-term trades. So a trader needs to know their trading method well, to the point that it is almost second nature and they also need to keep their emotions in check. While it may be difficult to do this initially, many of us have already mastered other Endeavors that require real-time critical decisions, as tested on automobile driving. . Seeking to acquire ability is simply a matter of practice, practice and then more practice

Myth 5 ? The Biggest money is made on longer term moves lasting weeks or longer

A-Day traders can double, triple, quadruple, and more beyond that of a person trading the longer term trend. This is because a market will naturally weave up and down as it develops, Allowing for repeated profits covering the very same range. Having done both I know firsthand that a successful day-trader can blow away any short-term or long term investor when it comes to profits. The only time a short-term trader will manage to make more profit is when a market gaps over night, but even with this figured in a successful day-trader will usually be rewarded much more handsomely over the long term.

Myth 6 ? When you day trade you miss out on the big profits generated by overnight gaps

You also miss out on the overnight losses as well. Indicate gaps and high volatility in many cases the market will swing violently both ways. Day-trading that protects you from overnight risk. But here is the surprising twist about overnight gaps, it is not uncommon for a market to close an overnight gap during the day, giving a day trader a chance to capture the profit generated by overnight trading anyway. There are of course some markets that are not well suited for day-trading, while others are. Sun-market choice can make a difference when it comes to Considerable this issue. Trading a market that is inclined to overlap itself during the day will more than make up for any gaps that occur overnight.

While there are many more myths that could be dispelled here, it is therefore important to be balanced and consider the other side of the coin, the negative aspect of day-trading. While day-trading is a great way to make a living when you are consistently profitable, it can therefore be the worse career choice if you consistently lose. This is true of any type of trading, but in day-trading to individual Typically has given up a regular job and of course, a regular income. So, more is Demanded emotionally. This factor is one that most Latter assume is of no concern personally and yet often Proves to be the one issue Preventing their success. There is an inherent weakness of emotion that everyone has and yet most refuse to believe they could personally have an issue with it. So they often fail to ever address it correctly and it continues to plague them. However, if a trader does learn to trade profitably on a consistent basis and they also learn to control their emotions then day-trading is absolutely one of the greatest means for making a living that anyone can pursue. The freedom to work when you want to, the amount of money that can be made, and the lifestyle it provides is truly amazing. It really is all that is promised, the dream job. Although it takes a lot of work to reach that goal, do not be swayed by the myths about day-trading. This one is for real id=?article-resource?> If you want to make day trading a reality for you then visit http://greatesttradingtools.com/ to learn expertise.

Michael J. Parsons is a professional futures trader and author of several published books and trading courses. He is a pioneer of several new and unique methods of trading that are revolutionizing how markets are Analyzed and traded. Even his astounding market insight and ability enabled him to publicly predict in advance the exact week that the 2008 decline of the stock markets and would begin to forecast just how low they would actually drop.

His method has received channel worldwide acclaim for its practicality in real world trading and the accuracy of his reversal method is legendary. His methods are extremely advanced and cutting edge. This is the future of technical analysis. For over a decade he has been teaching other traders how to master the markets and take control of their trading. He has also provided analysis, consultation and trading signals to hedge funds, traders and corporate individuals

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