Investing Guide ? Blog Archive ? Day Trading in Your Birthday Suit

Day Trading in Your Birthday Suit

Day trading has become extremely popular with the average individual investor. Why? Because all the tools of the trade are easily accessible including real-time market activity, investing indicators and lightning quick trade executions, and enough charts to make Milton Friedman dizzy. Your home becomes your own personal Wall Street except you don?t have to wear those silly vests or use those weird hand trading signals, in fact you can sit in your birthday suit in front of your screen with a beer or cup of coffee and switch to daytime TV if you get bored.

Your mini Merrill Lynch can be set up for Less Than a Dinner at a nice Steakhouse

To set up a day-trading operation, you?ll need a few things. First you need a computer and it should be rather fast. I?d recommend adding anything that will enhance its speed like a Raptor Drive. Next you?ll need a high speed internet connection. Unless you live with the Lun-Bawang natives in Borneo, you probably have access to some form of a satellite, high-speed connectivity. Third, you?ll need trading software. There are hundreds of options some expensive and some cheap and some let you pay monthly. I?d suggest you go with a monthly version until you?re sure this is your gig. You?ll also need a separate old fashioned calculator.

Test Drive the Speedster

Day trading usually involves flash trades, in and out of markets, whether they?re derivatives, or commodities, or currency trades or futures, the most common of which is S&P futures (Standard and Poor?s 500). If you aren?t making flash trades, why day-trade? You can call your buddy broker and place buy/sell orders all day long. No?Day Trading is usually used by people who are looking for daily/weekly income where the rewards can be incredible. Every tick on the S&P futures market is $250. I?ve made and seen others make $5000 in ten minutes.

You?ll usually only hear about the big wins when you?re talking to your buddies in the clubhouse. In fact, I?ve also lost thousands and seen people lose thousands in the same course of a few minutes. Most experts suggest that before you start playing with real money, that you paper trade until you?re comfortable with your system and strategy. Some software will start you with a hypothetical balance of say $50,000 and you can place buy/sell orders, set stop losses or automatic entry signals just like you would with real money. Beware though, even the best strategy?s can and will go awry. You?ll lose your internet connection, The market might be free-falling and you can?t get your trade executed on time. Volumes could be written about the psychological implications of entering and exiting the market.

A Man?s Gotta Know his Limitations

Trades will happen right before your eyes and you?ll see trends that indicate the market is tanking or skyrocketing. The beauty of day trading is that you can win in either market. Going long means you anticipate a stock or investment will rise. But you can also short a position: It?s basically simple: Short sellers/investors make money by guessing that a stock/or investment they hold will drop in price. If the price does drop, the seller/investor can buy it back at the lower market price. Day traders love volatility. In vehicles like S&P futures, volatility and big bands of movement on a chart symbolize potential big profits to an experienced trader.

The market always moves in waves and will oscillate up and down. It is rare to ever hit a buy at rock bottom or a sell at the top of the band on a price chart. The biggest problem facing most day-traders is psychological. The excitement of a successful trade or the sheer panic of a trade heading to Antarctica will often take a trader out of his well thought strategy and potentially erase gains or compound losses. Good advice includes getting out of the market when your daily profit goal is met, and likewise, do not under any circumstances, chase losses. Some investors use a three strike rule. If they miss on three consecutive trades, then it?s time to shut down, grab a beer, and jump back in tomorrow. Day trading is the ultimate in independent investing. You?ve only got yourself to congratulate or yourself to blame.

The tools are all there. The market is moving, you?ve seen this trend before, paper traded it a hundred times, so you take a deep breath, double check the chart, and dive in. Relax, you know how to swim, the current is strong and you don?t fight it, you get to where you want to go and get the hell out of the water before the sharks move in.

Welcome to day-trading!

Kelly Bowlin is a freelance writer based in Los Angeles. He?s written 2 novels and a collection of short stories title: The Modern Wild West in Shorts. He holds a bachelors degree in finance from Cal Poly Pomona.

Source: http://www.tok2008.org/day-trading-in-your-birthday-suit/

freedom riders survivor redemption island facebook dislike button ralph macchio mariska hargitay jeep wrangler international monetary fund