Day Traders - What Are They?

 

Day trading is the practice of purchasing and selling of currencies, stocks, stock options or future contracts. A person who buys stocks all throughout the day is what they call as a day trader. There are actually two types of day trader. The first one is an institutional day traders and the other one is retail day traders. Basically they all go about the same things. They perform similar duties and tasks but the institutional day traders normally trade for a huge financial institution. Therefore, they deal with huge sums of money. Due to the huge capital they have, they have better access on technology, tools and data. 

 

The retail trade worker is someone who works by himself or work in a smaller group of traders. The capital they use is of their own. There are also times wherein they trade with the money of the other people. The place where day traders make their profit is by taking advantage of stocks that are small priced. Find out more about this when you check this buyers guide. These are stocks that they can buy and sell in a very minimal amount of time. There are also times wherein they purchase a stock and hold on it for a few seconds to minutes. They call it scalping. Although the movement of money or the increase of money is just a few cents, the amount of money invested is is actually huge.

 

Margin trading is the act wherein traders will borrow dome money to the trade market. This is a risky move because the trader would have to sell on the slightest loss detected.

 

Range trading is another method used by many day traders. This is the places where traders identify a s stock trading. By using their own data and various technical analyses, and with worlds fastest pcs, they are able to identify the points of resistance. With this type of method, they can pinpoint the low end of a price range more accurately. Afterwards, as soon as the stocks rise once more, they can take a position in. once the stocks reach a high point, they sell the stocks.

 

Anybody can become a day trader. You just need to make some research and practice as much as you can. You can start your research here at http://www.ehow.com/how_4911172_start-day-trading.html. Learn the trade by incorporating numerous strategies. This will work for your own benefit as well. Yes, day trading can be a very bold and a risky thing to do, but the rewards are surely very worth it. You just need to be keen and detail oriented.