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Basics of Day Trading

Basics of Day Trading

Day trading is the process of purchasing and marketing the stocks on the same day. And the investors involved in this type of trading are called a day traders. Day trading is mostly adopted by the individuals who are interested in earning profits within a shorter period of time. Day trading needs acute attention as the market structure changes by every minute. If one doesn’t stay attentive, he/she might end up losing an opportunity to earn a decent profit. The investors purchases the stocks in the morning and sells them in the very same day. Whether they end up earning a profit or suffer a loss is entirely depending on whether they made the right choice when it passed by them.

Day trading doesn’t actually force the investor to sell the purchased stock the very same day, and can be carried on to the next day, however, it might cost some brokerage. Day trading requires the undivided attention of the investor for approximately six and a half hours, and thus, is not the business for the people who are busy. The lure of high margin of profits drags many individuals into this market, however not all end up leaving the market on a higher note. Many end up facing losses while few scrap through unaffected. It is always advised that only the money that one can afford to lose should be invested in this. The market is highly fluctuating and unstable and thus requires the undivided attention of the investor if he/she wants to avoid facing losses. An individual needs to do proper and thorough research on the company they plan to invest in, so as to ensure they don’t get deceived in the end. Cases of fraud is also nothing new in this field, so caution should also be taken in that direction. Where day trading could prove to be the only source of income for many, lack of concentration will lead to unexplainable losses too.