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Day Trading Stock Online: Basic Techniques For Beginners

Day trading stock online is real seat of the pants stuff for all participants, but none more so than for the novice trader. The casualty rate is high enough amongst experienced professionals, but for the raw beginner it can be an absolute minefield if basic day trading principals arent rigorously adhered to. Just because youve made a few successful mid to long term trades in your time doesnt ensure that youll be the next talk of Wall Street when you try your hand at day trading stock online. Far from it! Not surprisingly, day trading irrespective of ... read more

Article Title:

Article Body:

Day trading stock online is real seat of the pants stuff for all 
participants, but none more so than for the novice trader. The casualty rate is 
high enough amongst experienced professionals, but for the raw beginner it can 
be an absolute minefield if basic day trading principals arent rigorously 
adhered to.
Just because youve made a few successful mid to long term trades in your time 
doesnt ensure that youll be the next talk of Wall Street when you try your hand 
at day trading stock online. Far from it!
Not surprisingly, day trading irrespective of the asset class involved has 
been likened to extreme sports, with the only difference being that the thrills 
and spills are confined to the minute by minute fluctuations of your trading 
account. Perhaps the only saving grace for those who fail to plan their trades 
in advance is the fact that no positions are held open, i.e. carried forward, to 
the next day. If nothing else, this limitation helps prevent further erosion of 
capital when a trade turns sour.
So what motivates investors to become involved in day trading stock 
online?
A primary motivation of day trading stock online is understandably the lure 
of quick money. Another motivating factor is that it isnt necessarily any 
riskier than other forms of trading activity. However, unless thoroughly tested 
and proven trading strategies are put in place with each trade, the risk of 
incurring substantial losses within a frighteningly short period of time is all 
too real. 
Basic Strategies:
There are six basic strategies day traders use to make a profit: 
  Spread covering  Technical 
trading  Scalping  Range trading  Playing news 
events  Trend following. 
Spread covering refers to buying at the BID price and then selling at the ASK 
price. The spread is the difference between these two prices. 
Technical trading is simply the action undertaken by a technical analyst. He 
or she evaluates securities by relying on the assumption that market data, such 
as price charts, volume, and open interest, can help predict future, usually 
short term, market trends. Unlike fundamental analysis, the intrinsic value of 
the security is not considered. Technical analysts believe that they can 
accurately predict the future price of a stock by looking at its historical 
prices and other trading variables. Many technical analysts are also market 
timers, who believe that technical analysis can be applied just as easily to the 
market as a whole as to an individual stock.
Scalping refers to an extremely quick trade for a small profit. For example, 
if you bought 20,000 shares in XXX Inc. @ $1 per share, i.e. $20,000 invested, 
then sold them 45 minutes later for $1.03 per share, $20,600 gross return,  
you would end up pocketing a cool $600 less brokerage. NB: Remember that when 
you are day trading stock online, the round turn brokerage fees are minimal.
Range trading is a little harder and inherently more risky, but the returns 
can be proportionately greater, too! If you are canny enough to be able to pick 
the intra day market swings and either BUY at or near a low, then SELL at or 
near a high you can often make substantial profits using this method. But you do 
have to be wary, because if you buy into what you think is an intra day low 
point, only to discover that the market sentiment has changed and that a severe 
sell off is in progress, you could get badly burnt! 
Playing news is the realm of the adrenaline seeking day trader. The technique 
refers to buying a stock which has just announced, for example, a short sell on 
bad news,  the contrarian traders love this sort of play as they will be 
standing in line to BUY the stock at the end of a short, sharp sell off in the 
belief that most if not all the bad news is already factored into the market and 
therefore there wont be any further downward pressure. The sheer volatility 
offered by unexpected news announcements can provide the diligent day trader 
with huge potential for quick profits, or losses if they call the market 
incorrectly.
Trend following assumes that if a stock have been rising steadily it will 
continue to rise. Admittedly, this technique is better suited to position 
traders, i.e. where stocks are held for a number of days, weeks or even months, 
but in strong bull markets some stocks will rise steadily for days on end, 
making the intra day trend follower a very happy chappy.
Live Coaching
When trading on an intra day basis you need to take into account many factors 
including: time of day; liquidity; pending announcements such as corporate 
profit reports, interest rate movements, currency fluctuations; macro and micro 
trends; market sentiment, in fact, almost anything at all that may have an 
impact on your trading results.
So, if you want to radically improve your day trading stock online skills, 
live coaching or even online mentoring with a recognized industry professional 
can be worth a hundred times the price paid. Coaching can take place in 
different forms including: in person coaching; online coaching session; or over 
the phone. 
If youre hell bent on being successful, but youre still new to the game, 
youll be tossed to the lions unless youve acquired the necessary physical and 
mental skills to survive and profit from day trading stock online. Do yourself, 
your pride, your career and your bank manager a big favor by making the 
commitment to learn as much as humanly possible about this fascinating and 
potentially very rewarding form of investing, and secure the services of a live 
coach to see over your trading.

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