Day Trading For A Living

I was reading an article today which maintained it is not possible to make money day trading. Naturally this piqued my interest because I day trade for a living and last time I looked I was doing OK.
The article began by making the very valid point that the vast majority of day trading articles are not written by traders at all, but rather they are written by people marketing systems with hypothetical track records created with the benefit of hindsight.
That is absolutely true.
It is equally true of articles about every other trading style in commodity futures, stocks, forex and options. Whether it is covered calls, trend following with our extra special absolutely never seen before new indicator, swing trading, pairs trading, spread trading, or selling naked options, or any other style, it will often have a hypothetical track record. The time period of the method being promoted is absolutely irrelevant.
The article quotes CFTC rule 4.41 which every futures trader has seen many times. It says:
"Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown."
This pertinent warning is not confined to day trading systems. It is applicable to ANY trading system in ANY time frame where hypothetical or simulated track records are provided.
You see, most system developers research historical data to find high probability setup patterns. They develop indicators and trading rules to exploit these patterns. There is nothing wrong with that, so long as it is realized that the resulting system is optimized over this data set. The only valid way to test the system is on a completely different, independent set of data. Often a system that looks spectacular on the data the developer was originally working with will fail miserably when applied over a different period or in a different market.
The article went on to say that all day trading systems lose because "volatility in short term time frames is random and prices can and do go anywhere, meaning that if you try and use support and resistance levels they wont help you with your trading signal or help you get profitable market timing. You therefore cannot get the odds in your favour and will lose over time. This is fairly obvious when you consider that the price in any financial market is made by a vast diverse group of traders".
Well, that is quite a statement. The fact is "volatility" exists in any time frame and, by definition, it is random in the time frame considered. Indeed, prices can and do go anywhere, whatever time frame you are looking at.
Support and resistance levels are identified from trading charts. If no time scale is displayed it is impossible for any trader to differentiate between a 1 minute chart, a 1 hour chart, a 1 day chart, a weekly chart or a monthly chart if they are not told which market they are looking at. The fact is all charts, in all time frames, exhibit similar characteristics. You will find trends, ranges and most importantly support and resistance levels. It follows that whatever edge you think you can get from identifying support and resistance levels in one time frame is equally applicable in the other time frames too.
Most successful traders use strategies which either (a) sell support and buy resistance, or (b) buy breakouts through resistance and sell breakouts through support. These core strategies are available to any trader working in any time frame.
The distinguishing feature of the day trader is that (s)he always exits trades before the end of the trading session. No positions are held overnight or over weekends. By adopting this approach the trader minimizes "event risk" which is the chance that some dramatic event will so disrupt the markets that you suffer a major loss. (Stop losses are ineffective in this scenario because the market "gaps" through your stop loss level.)
The REAL drawback to day trading is trading costs.
Say that in some hypothetical market, the typical trading costs are commissions (2 points) and slippage on entry and exit (1 point each). So for each trade, trading costs average about 4 points. Now, if a long term trader typically targets 100 points, trading costs would be 4%. For a medium term trader targeting, say, 40 points trading costs are 10%. But for a day trader, targeting 8-10 points, trading costs are 40-50%! Obviously, if a trader is determined to trade this market, then medium to longer term trading is the only sensible option. It would not be surprising for a trader focussed exclusively on this market to form the opinion that day trading does not work.
Clearly, then, not all markets are good for day trading. If the average market movement is just a few points, the trader will be unable to find short term trades which cover the trading costs. Even where the trading costs can be covered, they often turn what looks like a good system into a poor one. This is because, as a rule of thumb, trading costs are nearly always deducted from theoretical profit in successful trades, and added to the theoretical loss in losing trades. This significantly changes the average win to average loss ratio for the system.
To prosper, the day trader seeks out volatile markets where the the projected trading costs are a small percentage of targeted gains. The Expectancy of the system used, allowing for the impact of trading costs on the average win to average loss ratio, must be positive.
Fortunately, many such markets exist. The rather stodgy forex market, with its high trading costs, is NOT a good example. However, there are commodity markets and many individual stocks which exhibit the required volatility.
David Bennett trades US commodity futures from his home on the Gold Coast in Australia. He provides coaching and mentoring services for people wanting to start trading for themselves. Visit http://www.12oclocktrades.com to read more futures trading articles.
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Day Trading Sites - Choosing One For Profits

With the rise of online trading we have seen a dramatic rise in the number of day trading sites offering a variety of day trading systems, e-books and courses to help you scalp the market and make small regular profits that can build wealth, let's look at choosing the best.
One of the big myths of trading is that you can make money day trading - if you ever see a day trading site that has a track record of gains, look for the disclaimer below or a similar one. Read it carefully:
"CFTC RULE 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown".
So this means you can make up any track record you like, as you are simply simulating it and know the closing prices - try and find a day trader with a real time track record audited over the longer term ( 2 years plus ) and your in for a long search.
Day trading and long term profits are a contradiction in terms - why?
The simple reason is - you can never get the odds in your favor and are guaranteed to lose. All short term volatility is random, support and resistance levels in these time frames are meaningless and you simply can't set levels that are valid to key off and get the odds in your favor. Of course this is obvious. We have a huge mass of traders millions of them, trading all with different systems and personalities and to say you can measure what they will do in a few hours is laughable and totally incorrect.
Many traders say that human nature is constant and therefore prices move to a scientific theory. You will often find them use such theories as - Gann, Elliot and Fibonacci but they don't work.
Why?
Because human nature is constant but we certainly don't conform to a scientific theory when trading! We are creatures of emotion and you can't measure these scientifically. If there were a scientific theory that worked, we would all know the price in advance and there would be no market.
Most day trading sites are not run by traders at all there run by marketing organizations that sell simulated track records with hyped copy, to appeal to naïve or greedy traders - they make their income from selling product and the trader takes the losses in the market. If you want to make money avoid day trading sites and day trading it really is that simple instead, look to trade longer term trends where you can get the odds in your favor.
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Day Trading Brokers - Tips On Choosing One

With the rise of online trading, traders are engaging in day trading and trying to make small regular profits and for this they need a day trading broker. If you want to choose one use the simple tips below.
Transaction Costs
The most important criteria in choosing a day trading broker is the cost of doing business. You should choose the lowest transaction cost you can. If you trade regularly then transaction fees mount up and impact your profit and loss.
Execution Only
If you want a day trading broker, you want them to transact orders only and don't want advice. Many brokers will offer you signals and alerts and advice - don't fall for it. If brokers could make money they would be traders and not brokers. If you want to be successful in trading then you need to do it on your own - only you can give yourself success.
Trading Platform
You need to be comfortable with the platform the broker uses and ensure that it's reliable and you have 24 hour support. In most cases, a broker will let you test drive the trading platform and you can see how you get on with it with a demo trading account before risking real money.
Size and Security
Look for well capitalized brokers that have been in business for a few years, are stable and look at regulation and protection of your money. Bigger is better when you are using a broker on an execution only basis.
You want a broker that has been known for reliability over the years and you can easily check this by looking on the web. You should always search the brokers name and check any good and bad press they have. In many instances you will surprised at what you find.
Funding
Look at how quickly you can fund your account and how quickly you can withdraw. You should also look to see if the broker accepts online payments, safely and securely.
When choosing a day trading broker (or any broker for that matter), check the above points and keep in mind that your major cost is your transaction fee and this should be as low as possible. If you want to day trade and want a day trading broker that can give you the best service, the above are common sense tips that will help you find one.
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For free 2 x trading Pdf's and a wealth of trading material as well as more on the best day trading brokers visit our website at: http://www.learncurrencytradingonline.com
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Know More About Day Trading

Do we really understand the meaning of trading? Many of us don't know and that's the reason why people have depicted stock market as a place, which is more vulnerable for investing. If you talk about day trading, you get the same response from most of the people. Such type of trading is often compared as gambling - where you cannot predict what will happen at the end of the game.
Day trading as the name signifies is a process where buying and selling of stocks is done in the same day before the market closes. Mostly, experienced traders who better understand the market moods do such type of trading. Though it's not a hard and fast rule, but traders need to have a comprehensive knowledge of the stock market. Once you understand the market, you can go for such type of trading.
Internet has made things much easier now -- anyone can enter into the world of trading. Online trading facility today has brought a new vista for traders and anyone can invest and manage funds from any corner of the world. Moreover, online brokers and stock trading companies have further made things easier for stock trading. Open an account today, invest and manage funds from anywhere you like.
However, choosing an online trading company is also one of the major steps and needs a lot of market research. Since all kinds of information are available on the Internet, finding a good company is not that much difficult. Compare some of the major industries - compare their services and choose the one as per your requirement. The company with excellent previous records should be given prime importance. On the other hand, your broker also acts as a key role in your successful trading. Choose the stock broker, who could manage your funds and charge a low commission rate for each transaction.
Everyone knows that trading in stocks is associated with some kind of risks, but one can avoid those subtle risks through a proper research work, and through a comprehensive market analysis. You can follow some important points that are mentioned below:
Trade intelligently: This is the first and foremost point to become a successful trader. You should know when to buy and sell stocks to gain maximum profit. Target those company shares where you can expect growth. Buy and sell stocks on time -- in case the share prices fall suddenly, it is always better to sell shares unless a boom is expected.
Invest in the right direction: Once you start investing, your aim would be to gain maximum profits. However, don't invest all your profits you make from the market. It is always better to invest a proportion of profits and move accordingly. This will help you in maintaining a balance between your principal investment funds and the profits.
Keep you abreast of the market news: Since, day trading is a process of buying and selling of stocks in the same day, therefore, it is important for you to keep in touch with the latest market updates. You can access all such information from the trading Website. Keep an eye on daily stock quotes and trade accordingly.
IF you follow the points above, you are bound to get profits. So, what are you waiting for, start planning and invest your hard earned money. Your present investment plan will definitely help you reap benefits in future. But, follow every steps with care and learn the fundamentals. Once you understand the market, you will always be a successful trader.
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Momentum Stock Trading - Entry Points Are Key To Profiting From Momentum Trading

Momentum stock trading is the art of taking profits from the stock market with short-term trades designed to profit from a stock's upward or downward daily momentum. Many investors consider this to be a low risk trading method because, done properly and with discipline, you only enter a trade when the targeted stock's momentum is already moving in your direction.
There are a handful of key factors in successful momentum trading. This article looks at the importance of entry points. An entry point is the point at which you are willing to enter a trade.
Why bother setting specific entry points?
Quite simply, because you want to catch the momentum once it has started, instead of buying and hoping your prediction comes true. For example, let's say Stock XYZ closed at $58, with a recent hi/lo range of $55-60. Your research leads you to believe XYZ is poised to run up. Great! So you put in your order to buy first thing in the morning. But what if the stock opens at $59 and then drops down to $56? Now you've got initial downward momentum working against you and quite possibly, a losing trade on your hands. The key to successful trading on momentum is not playing around within the recent hi/lo range.
How do I select an entry point?
Setting an entry point above the recent hi (if you intend to go long) or below the recent low (if you intend to go short) helps you catch bigger, more significant momentum in your trades. In our example, Stock XYZ was showing resistance at $60, i.e. the price has not recently gone over $60. I would set an entry point at something slightly over $60, like say $60.30. By setting your entry point above the most recent resistance level, your trade will only trigger provided the momentum is already going in the direction you predicted.
In other words, your trade will trigger if the stock price's upward movement reaches your entry point of $60.30. Now you are in play and you have got momentum on your side and a winning trade to manage. If, however, there is initial downward momentum, your trade won't trigger and you have preserved your capital for other trades. Setting proper entry points is therefore essential to your success in momentum trading.
Len Ksobiechhttp://amtrades.com
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Day Trading Questions Answered

There is so much information available to traders that sometimes I find it overwhelming or even confusing at times. Since the majority of the available and convenient information is in written form, it makes it difficult to ask questions of the author or the website. And if you do, more often than not you never hear back from them, right? And if you do, so much time has passed that you don't even remember asking the question much less why you asked the question in the first place.
Let's say a trader is not sustaining consistent profits, and his question is "What do I do?" For the answer, you can go to the internet via any number of search engines; you can go to the book store and/or library to find out how to establish consistent profits; you might even go to some seminars and courses to find the answer. If you're really on top of things, you might even ask your trading mentor.
It's a pretty broad question, but for as many traders that might be asking this question, there's probably just as many answers. Why? Because there are a number of moving parts that are necessary for sustaining consistent profits, and depending on where you are in your trading development, the answer can be different and vary for each trader. Integral components to the answer may include your trading plan, your trading style, strategies, and more.
The point is, you might "kinda sorta" find an answer to your question, but you may also find out relatively quickly that it is not necessarily customized to your current needs. To add to that, the answer to that question today may very well be an entirely different one if you ask the same question a year from now. The truth is, you need an affordable avenue for asking questions and getting direct, immediate feedback customized to your current needs and situation.
Well, I'm happy to report that there is a solution to this sometimes "path to nowhere" when it comes to answering your trading questions. Trading Everyday has launched a new FREE mini-series of seminars called "Day Trading Questions Answered". It is probably only one of very few seminars available without an agenda because the it is determined by you, the trader. Traders send their questions in advance or they can ask them when they join the seminar. The entire 90 minutes is dedicated to answering only those questions that traders bring to the table. Nothing more, nothing less. How refreshing is that?
So if you've had those nagging trading questions that you can't seem to find the answer to, you might want to consider registering for one of the sessions. Even if you don't have any questions, my bet is that you'll learn from the questions that other traders ask. It's free. You have nothing to lose and everything to gain.
Leroy Rushing is an active, professional day trader; trading coach; and eBook author. He is the Founder and CEO of Trading EveryDay, a distinguished provider of educational trading products and services that are available worldwide.
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Concept Of Moving Average

About my own experience, I strongly advise getting some education before you trade. Trading is an entirely learned skill. Having dedication for the markets is most important.
Moving averages are drawn for smoothening of the Charts. They smooth out the short- term wiggles to help the Trend make more clear. Short averages are used to measure or smooth short-term Trends and Longer averages are used to measure or smooth longer-term trends.
Moving averages may be : -
1. Simple 2. Weighted 3. Exponential
Simple Averages -------
The most basic is the Simple Moving Averages which takes the Prices from the previous user defined number of periods, sums them up and divides the summation by the number of Periods.
The average is overlaid on the Price Chart and Crossovers between the average and the underlying Prices are observed. When Prices are rising they are usually above the average. As long as Price remains above he average, there is strength in the market. When prices cross below the average it means that the market no longer expects to continue higher, at least temporarily. The more market participants taking this new view, the higher volume will be and the better signal.
Since an average smooths out of volatility, it serves as a proxy for the trend itself. Thus, along with an Up-trend, the average also turns up and vice versa. Market is strong when along with the Price Chart, average also starts rising. And the market is weak when along with the Price average starts falling.
There is no perfect number to use for a Moving average. Traders use it ranging from 5 DMA to 200 DMA and the same with weekly moving average. Its often provide support to prices in an Up-trend and resistance to prices in a down-trend. It works best should be selected by a "Trial and Error" method and depends on the time-frame you want to trend.
Sometimes, two or three or more moving averages are used for the purpose of Trading. The averages selected should depend on the time-frame of Trading. When the shorter- time moving average/averages move above the longer-term one, Traders can go along. Conversely, when the longer-term moving average goes below the Shorter-term moving average Traders can go short.
For Longer time-frame 30 DMA and 200 DMA are generally very useful.For Intermediate trend 13, 20 and 30 DMA are great.For Short-term trend determination, 5 DMA is excellent.
TRY IT YOURSELF.
To trade well, the correct state of mind is very important.
For more details about Moving Averages please visit http://stockinvestmentstrategies.blogspot.com/
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Day Trading Is Not Necessarily More Trading

In a recent trading session I was poised to take an entry for a nice looking short trade, but the pattern I was looking for never completed and the entry order was not triggered. I waited for a while, thinking that an opportunity to the long side might develop. However, none of the trading setups I look for appeared. Eventually I decided to pack it in and enter a no-trade-day in the books.
On average, this seems to happen to me on about one trading session each week.
Now, there is a perception that day traders are frequent traders, in and out of the market several times per session. Some are, but I am not. In the past, over-trading has been a problem for me, so I have very strict rules about it. I limit myself strictly to one planned trade per day, and if one of my trading patterns does not appear, I pass on the session.
This policy does some good things for me:
I do not rack up excessive commission fees.
I do not revenge trade, trying to get even for the day after a loser. (This almost always results in emotional trading on inferior setups.)
I do not give my profits back after a win.
I am careful about choosing the trade I make (because it is the only chance I am getting today!)
Since the majority of opportunities occur near the open, I am usually finished trading early in the session.
Most successful day traders I know do pretty much the same thing, day in, day out. Their trading methodology is boringly repetitive. They have found an edge, something which works for them, and they exploit it at every opportunity.
In my case, I look for certain setups or chart patterns to occur within a defined time period. If they do not occur, I place no trade in that session. Of course, by cutting short the period in which I am prepared to look for trades, and by limiting myself to one trade each day, I let quite a number of opportunities pass me by.
For me, this is worthwhile, not only for the reasons listed above but also for the sense of discipline and well being I get from a fixed, routine approach to the job. (Also, I know that for every opportunity missed, there will be another tomorrow!)
In my type of day trading, I probably end up taking only a few more trades than a medium term position trader. However, as my typical trades have durations of minutes as opposed to days for the position trader, my exposure to event risk in the market is much lower. This is a really important point for a conservative soul like myself.
The point to take from this is that day trading does not have to mean more trading. Quality is definitely more important than quantity. Inevitably the shorter time horizons of the day trader throw up more opportunities than fall to the longer term trader, but you do not necessarily have to take them all. Pick signals which fit your routine and maximize your winning Expectancy.
David Bennett trades US commodity futures from his home on the Gold Coast in Australia. He provides coaching and mentoring services for people wanting to start trading for themselves. Visit http://www.12oclocktrades.com to read more futures trading articles.
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Stock Trading Account

You can trade in stocks only through the stock brokers. You can open an account only if you are a US citizen, or, a resident alien. In both cases you need to provide your valid social security number. You must have become a major, at least 18 years old in your state of residence before you can apply for opening a trading account.
Usually there are four main types of stock trading accounts. They are individual accounts, joint accounts, IRAs ---Individual Retirement accounts, and Education Savings accounts. You have to select one of these accounts according to your personal needs and circumstances. You must be ready to deposit a minimum of $ 2,500 irrespective of the account you open. You can fund your account via free electronic transfer directly from your current bank account. You can also pay by check or wire transfer.
The individual investment account can be opened in the name of one person. Joint account can be opened for two people. It is also mandatory that both the persons should have reached the age of majority in their state of residence.
The third type of stock trading account is IRA or individual retirement account. It is a personal retirement savings account. It offers tax advantages to investors. You can deposit a part of your earnings into a tax-deferred brokerage account. Your contributions are also tax-deductible.
Individual retirement account-IRA-- is of three types.
The first type is traditional IRA. In this account, you can defer the payment of taxes on your earnings until you start taking the money out. The money that you put in is tax deductible in the year you put it in. The investors who are up to the age of 50, or under by the end of the year, can currently contribute up to $ 5000 every year, but those who are up to the age of 70 can contribute $ 4,000.
The benefit of investing under the traditional IRA is that you do not have to pay any taxes on what you earn till the time you start withdrawing the money. This process is known as tax deferment. This account makes sense because by the time you retire, you may be in a lower tax bracket. In that case, you will have to pay less in taxes on earnings from your IRA account.
The second type of retirement category account is Roth IRA. This account is similar to the traditional IRA except that you pay taxes on the money you put in while you can withdraw money without paying any tax. Those who are up to the age of 50 can currently contribute up to $5,000 every year and those who are up to the age of 70 can contribute up to $4,000. You should opt for a Roth IRA if you think you will be in a higher tax bracket when you retire. If you invest under a Roth IRA, your investments can grow tax-free. You can withdraw money after a period of 5 years from the date of opening your account without paying any tax with the proviso that you have turned 59. The withdrawal can also be tax-free if it is used for a first time home purchase up to a limit of $10,000. You will, however, have to pay 10% penalty if you withdraw early.
The third type of account in retirement category is Rollover IRA. A Rollover IRA is a holding account. If you transfer funds or stock from a retirement plan such as a 401(k) or 403(b), the money or stock can be allowed to stay in the Rollover account for a period of 60 days. Thereafter you will have to place the funds into another retirement plan. You can control your account during these 60 days. It must be noted that you cannot avail of this facility more than once a year
The fourth type of account is Education Savings Account or ESA. This account can be opened as a trust to pay educational expenses of the designated minor beneficiary and no contributions can be made after the beneficiary has reached the age of 18. The total contributions cannot exceed $2,000.
The trading account opening process with a stockbroker is very simple. It can be completed minutes. You can choose your own username and password to log into your account and then enter your personal information. You also need to read and confirm the account opening agreement. Thereafter your broker sends you verification email, which you have to respond to confirm having received it. This will ensure that the address you provided was correct.
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Stock Trading - Get Familiar!

Gut instincts and unthoughtful decisions; if these you think are the keys to success then better be ready for bitter experiences. The stock market is a total calculative and objective market that needs due care and attention to grab on to sheer returns. Hence, for fruitful returns, it is important to get familiar with various aspects of stock trading. Just a few words on that may intrude trading for better.
At first, understand the difference between any trading and investment. It should be noted that trading is easy and quick but investments take time. Don't expect huge profits over the night. It takes time for profit generation and needs whole package of consistency, patience and intelligence. In other words, discipline is the key to trade in stocks.
The grass of other side always seeks green, that's why; it is no use to copy other's investments. Utilizing one's own brains according to the conditions always pays off. It is inevitable to know the investments to be made and the type of the tools to be devised. Familiarity of the stocks to be invested in is necessary. Another tip for stock investing is being less greedy. Trying to squeeze the last drop of profits generally ends up in losses. Stock market, being fluctuating tends to have sudden moves, hence, try sell the shares at their rise rather wait them to be at their peak.
Stop running after tips and rumours- this is another valuable thing to be familiar with. Each individual has his own estimates and individual evaluations. Stock trading is basically done on future forecasts and calculations. Hence, chasing the tips and estimates may end up making losses. To avoid such situations, using self evaluation devising expert's tips is the best decision to rely on.
Future price appreciation appraisals must be the main focus rather the gains and losses. Any day trader when sell a stock start comparing with the price, the share was purchased at and all the focus remains on the effect of the transaction in terms of profits and losses. Instead of overall effect, the future price must be acknowledged. If the future of the share remains bright, it must be retained and vice versa.
Another thing to be taken care of is the pace of the fast growers. Share traders generally sell the share as soon as it goes up comparing to the purchase price. It should be highly avoided in case of fast growers. Some of the shares are fast growers and seek to grow highly in future. Though there may be some fluctuations but they are supposed to be retained and then investor can be seeking their accelerating future and thus fine returns.
In stock investing, there is no right time to purchase of shares. Most of the day traders wait for the right time and end up losing good opportunities. "Buy now" is the rule that works for investing in stocks. Last but not least, avoid large losses. Integrating and diversifying investments is the best way to divide risks and avoid fluctuation brunt.
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Online Stock Market Trading - Stock Trading At Finger Tips

Claims that online stock trading may be unsafe and revealing can be misleading, according to millions of users all over the world. Undoubtedly Internet trading has waved a special place in the lives of investors all over the world. Not only does it saves time but also tends to maximize the comforts of other investors. Now day traders and other investors can continue working their jobs and take care of the invested savings at one time. All they need is a PC to work and a registration with a registered online brokerage firm.
These firms are sheer at providing access to stock exchange and get tips for investing in stocks from time to time. Once an investor gets registered, the blues and reds of stock exchange start dancing on the screens and hence using the tips of experts and other research work available online, any trader can make money in stocks. As such, the comfort provided by Internet trading is not only the reason for its unleashed popularity. The other factors that contributed to it's heartedly acceptance all over the world can be listed as follows.
• Easy and handy: online stock trading is the easiest way to trade in stocks. Whether in office or at home, by just few clicks everyone can get access to online investments. The companies are listed on screen and all you have to do is to buy and sell stocks. Also, no more tiring paper works and stockbroker clinging add on to independent and easy investing in stocks.
• Facilities and services: with the recognition of online trading, there are many firms that are providing sheer services. The banks, for instance, provide joint trading, savings and current accounts. Also, other broking firms provide easy trading at low brokerages that attract other people to trade in stocks.
• Self-trading: working through Internet does not need the traditional way stockbroker clinging and going to stock market trading. With easy accessibility the tips and expected future moves are provided online which helps an investor to trade independently. With most of the research work and expert's tips available online, there is no need for the broker to be present in person.
• Cost: the cost for opening a trading account are quiet affordable and cheap. The fact that almost 5000 new accounts are opened every month says it all. Also, because of the brokerages to be paid are low in the competitive market. The discount brokerages and cheap trading charges are also quite mesmerizing.
• Security: if some people have doubts regarding the secured transactions and tension free privacy, then online accounts are best. The sites are totally secured and each user has his personal password that is non-transferable. This password can be created by the user for transactions, hence deferring other person to login the account.
• Speedy: other benefit of online stock trading lies in its speed. Within fractions of seconds a trader can trade in stock exchange by few clicks while trading online.
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Steady Income From Day Trading Futures

There are still a number of expert traders out there who claim that it is impossible to make money day trading. As a person who relies on day trading for my income, this claim always surprises and saddens me. Make no mistake, day trading is no soft option. It is tough, competitive and unforgiving of mistakes. But, if day trading is your dream, it can be made to work for you.
Most successful traders find a niche which suits their temperament and which they become good at. In the process of doing this they may try different vehicles and strategies which are unsuccessful. However, because they fail in a particular area, it does not mean that it is impossible to make money in that area. All it means is that the trader was not good enough when (s)he tried it.
For example, there is not much that you could teach me about various option strategies. Theoretically, I know how to make a lot of money with options, but in practice it never worked out for me. Buying out-of-the-money options does not have enough winners for my temperament. Selling way-out-of-the-money options has plenty of winners, but really high stress levels on those few occasions when the options flirt with the strike price as the expiry date approaches. Multiple option strategies look good, but trading costs always seemed to kill my trades.
That said, I do know traders who do well with options, so obviously money can be made if you have the right strategy and temperament.
Fortunately for me, I found my niche day trading grain futures contracts, and I love it. What I like about it is that it is short and sharp, and the risk is tightly controlled. By short and sharp I mean that I only have to trade for about thirty minutes each day, but I have to really concentrate during that period to make sure that I execute my strategy with no mistakes. As for risk, I am usually in the market for a matter of minutes, a few hours at the most, and never have positions open overnight or at weekends.
This suits me perfectly. I enjoy the quick feedback from my trades, and I sleep easily at night knowing I am not in the market exposed to freak events that can be very painful when you are in a leveraged position.
Authors criticizing day trading are usually trading Forex. The day traders enemy is trading costs, and despite the commission free trading generally offered by forex brokers, trading costs are high because of the spread. If I were to try day trading forex, I would use futures contracts at the CME (Chicago Mercantile Exchange) during high volume periods.
However, I prefer markets with enough volume to ensure a tight spread, but not such a huge volume that the market becomes hard to read. The grains (soybeans, wheat and corn) fill the bill exactly for me. Equity indices (Russell 2000, S&P 500, Nasdaq eminis and the Dow $5 contract) are also good at times, but I find them more difficult. I dislike the very high volume bond market. I am not saying you can not make money there, all I am saying is that I have not succeeded!
Share traders often find a similar effect whereby very high volume shares like Microsoft are harder to day trade than a middle of the pack S&P 500 company. Usually successful share traders watch a group of stocks which they like and feel confident with.
The point is you do have to make the effort to find the best markets for the kind of trading you like to do. I think it is putting the cart before the horse to decide on a particular market before you decide on your trading style. My advice is to find the style that suits you, then find the markets that respond best to that trading style. Of course, markets are not static, so you will always be monitoring them, and be prepared to change if another market comes to the fore.
I have discussed the keys to successful day-trading in other articles, but briefly they are as follows:
Understand how support and resistance works in the market.
Build a trading method utilizing support and resistance levels. (The tactics you can apply near these levels are almost limitless.)
Back-test your method on independent data (not the same data you used to design it). Ensure it has a positive Expectancy and good frequency of trading opportunity.
Plan your money management strategy so that you know how much to invest in each trade without exposing yourself to too much risk.
Practice, practice, practice, so that you can execute your trading plan flawlessly every time the opportunity occurs. This is harder than it sounds when day trading. Things happen fast and there are a lot of things to think about.
The trader who does these things, and has the discipline to stick to the trading plan during winning and losing spells, will be successful. As many, many authors have written, trading is 90% psychology. The main enemies are your own lack of discipline and self-honesty. Of course, the majority of day trading is done from the trading rooms of large investment banks and brokerages, and the professional traders involved are using bank funds and are not subject to the same levels of stress. You have to learn to perform as well as they do despite the additional anxiety of having your own money at risk.
I suppose this subject could be discussed back and forth forever and a day. The acid test is to look at a trading record. For this reason, I am publishing my trade executions report at the end of each session in my trading diary, starting from 1 Jan, 2008. That way, you, the reader, will be able to form your own views as to the profitability or otherwise of day trading.
David Bennett trades US commodity futures from his home on the Gold Coast in Australia. He provides coaching and mentoring services for people wanting to start trading for themselves. Visit http://www.12oclocktrades.com to read more futures trading articles.
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Share Market Basics

You can buy and sell any stock over the Internet that is online stock trading, you don't need to call up a broker. You can do online stock trading with a minimal investment you should get started today and then start learning about the stock market and choose the stocks you want to invest in.
Day Trading ~~~~~~~~~~
Day trading is defined as the buying and selling of a security within a single trading day. It is designed to produce short-term profits. Day trading demands access to some of the most complex and sophisticated financial services and instruments in the markets. Trading with a stop-loss is extremely important for all traders to cut losses while they are still small, and to preserve their trading capital in case the market moves against their trade. Trading at certain times of the day is simply not profitable and in fact is highly risky. Day trading involves taking advantage of price movements in stocks within one trading day. Day trading strategies demand the use of leveraged or borrowed money to make profits. Day trading used to be the sole preserve of financial firms and professional investors and speculators. Day trading is however a mentally and psychologically challenging activity and is by no means meant for everyone. If you can't be highly disciplined and stick by predetermined selling points, day trading is not for you.
What is Technical Analysis? ~~~~~~~~~~~~
Day trading is defined as the buying and selling of a security within a single trading day and market directions based on statistical analysis of variables such as trading volume, price changes, etc., to identify patterns. Research and examination of the market and securities as it relates to their supply and demand in the marketplace. The technician uses charts and computer programs to identify and project price trends. Now technical analysis has become increasingly popular. Technical analysts use their findings to predict probable, often short-term, trading patterns in the investments that they study. It suppose markets have memory. If so, past prices, or the current price momentum, can give an idea of the future price evolution.
What is Fundamental Analysis? ~~~~~~~~~~~~~~
Fundamental analysis is about using real data to evaluate a security's value. Although most analysts use fundamental analysis to value stocks, this method of valuation can be used for just about any type of security. It is scientific study of the basic factors which determine a share's value. The analyst studies the industry and the company's sales, assets, liabilities, debt structure, earnings, products, market share; evaluates the company's management, compares the company with its competitors, and then estimates the share's intrinsic worth. More effective in fulfilling long - term growth objectives of shares, rather than their short - term price fluctuations.
The truth of the matter is that the market is a game of money flow played by the big players as they move money around from stocks, to options, to financial futures, and back and forth in a number of different ways, all in the pursuit of greed and large profits. And remember, I previously mentioned that "a good portion of that money is being made off the backs of the uninformed individual stock trader and investor who blindly trades and invests in the stock market today." The principle in the markets is "Buy when everyone else sells and sell when everyone else buys". Investors should know that when buying a stock they are simply buying ownership in the companies.
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Good Trading

Good trading generally entails getting smaller when things are going bad and getting bigger when things are going well. A sure sign of a losing trader is one who is generating margin calls on days he or she is losing money. If you buy a stock and things are going your way, then consider buying other stocks. Perhaps your timing and general read of the overall market is right today. However, if stocks you are trading are not moving in your direction, then do not add to your positions. Look to get smaller. In general, you need to make as much money as possible when the opportunity is there and lose as little as possible when the opportunity is limited. There will always be other opportunities. Remember, trending markets and stocks have more potential than sideways or choppy markets for non-market makers.
Limit your losses. Only you can determine what is right for you, but whatever you decide, make sure you stick to it. Many traders limit them selves to one or two levels, at the most. This means that in a stock that is a quarter of a dollar wide, they do not let themselves lose more than half a point. While this might not seem like much, any more can add up quickly. Remember that you are a trader and not an investor. Set a limit on what you are willing to lose per trade and also per day, and make sure you stop at this point. Another good stop point is likely to be the point at which you find yourself hoping or wishing. This is a good sign to get out. Do not let yourself get married to a position. Recognize that every second of every minute of the trading day there is another opportunity. There is no reason to insist on being there when a stock in which you have taken a beating turns. Do not let one bad day or a bad position ruin a week or month or even a year of hard work. I have seen this happen. Perhaps the most important rule I've ever learned from trading is never to take home a losing position. Sure stocks come back sometimes, but in the long run this rule is a must: Do not take home losers.
Take home winners. Winners are generally good to take home, and in the long run this will prove profitable. In fact, some traders build a whole career around taking home other peoples winners. They do this by buying stocks in the last hour that are up on the day, that are trading on good volume, and that go out strong. This strategy tends to work because the market makers in these stocks usually are forced to go home short. With this in mind, any buying pressure at all the next morning will generally push the stocks higher, while selling pressure can be absorbed by the market makers covering their shorts. A few words of caution here: Overnight trades equal higher risk and therefore higher returns. Be respectful of earnings releases, expected news, or the potential for unexpected news. Barron's lists some of the upcoming earnings. Also, companies will generally tell you their earnings release date if you care to call them. In addition, be care ful with options and futures expirations. They can cause unusual moves that tend to reverse the following morning. Expirations and their effects are generally scheduled for the third Friday of the month, but sometimes positions can be unwound earlier.
Robert Daniels is an author for the website Daytrading Gapping Swingtrading:
http://www.daytrading-gapping-swingtrading.com
Daytrading Gapping Swingtrading website offers quality stock picks inside their stock trading chat room.
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Day Trading - Still A Possible Way Of Earning Profits

Day trading is another one of the options in stock trading where you can purchase stocks, sell them off the same day, and earn the amount of profit, which has been accrued that very day. In day trading, the trader does not hold the stock until the next day; instead sells it off by the end of the day.
There are many advantages of day trading as defined by the stock guru's. First of all, it is a safer way for people who do not have a lot of know-how in stock trading; therefore, they can easily follow their stocks during the day and sell them off as soon as they see a rise in the value.
Secondly, day trading allows for lesser speculation as the trader may not see a lot of variation in the values during a span of a day. Usually day trading does not vary in value of more than 30%. But then again it is easier to keep a track of and not to incur a loss.
If you plan to invest your money in day trading, make sure you do not put in all your hard earned savings in one go, as this might prove to be quite dangerous for you. Get yourself a good day trader whom you can rely upon. While investing, make sure you have a good eye for analysis.
Many traders and investors rely too much on software's used for these purposes, but you do not get a true picture of the market just by using these software's, as there are many factors which constitute a stock market and some of them can only be assessed through skill and experience.
Day trading requires analysis and ability both. Trading on stock all by yourself is not a very sensible thing to do, unless you have enough confidence in yourself. The best advice for beginners is to find a good broker who would do the trading on your behalf.
Author of this article, Arindam is doing penny stock trading for last 17 years. He personally recommends two top quality resources for hot stock picks and Future trading. Click the links to download future trading and penny stock resources.
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Cfd's Versus Futures

I have never traded CFDs (Contracts for Difference), but increasingly I am finding that my non-US clients have been attracted into trading by companies marketing CFD instruments.
I say non-US companies because I understand that CFD trading is illegal in the US. I think there may be a good reason for that.
If you trade on a short term basis, you have to become paranoid about trading costs. If you are a long term position trader looking at, for example, a 90 or 100 point gain in a soybean trade, you are not too concerned about a bit of slippage on your entry, and a few dollars either way in the contract brokerage fee will not be too significant.
However, if you are a day-trader, you will be loading up with a lot more contracts looking to capitalize on just a few points of movement. Now slippage and brokerage costs are highly significant and have to be kept to an absolute minimum.
There was a time when a trader off the exchange floor had no chance in this game, but the advent of modern electronic brokerage companies has changed all that. Even though I trade from Australia, my brokerage company has very competitive fees and a platform that executes trades with minimum slippage.
Now, back to CFD companies. A little investigation showed they offer commodity trading in the grains, which is my speciality. What is more, there is NO brokerage fee on the contract, and no interest charge on long term holdings.
This seems too good to be true, but there is a catch. It is the spread. In the real futures market I am usually trading with a half point spread, which means if I buy and immediately sell - or sell and immediately buy - I am down half a point ($25 per contract).
However, the spread I am being quoted for a CFD is about five full points! If I go with them I have to make five points ($250 per contract) on the trade to break even.
No thank you! This could be a good deal for some trading styles, but it definitely would not suit mine. I am looking to be in and out of the market within a few minutes, participating for a short period in intraday trends. This spread would make it totally impractical.
It reminds me of the many forex brokers that popped up a few years ago offering commission free trades. Yes, they were commission free, but the spread back then was five pips! On top of that, there were interest charges payable each day you held the trade over night.
At about $12.50 per pip on the Euro contract, that was quite some alternative to commission! Give me a futures round trip commission of less than ten dollars on a currency contract, plus a nice tight spread and no daily interest charges, any day!
Nowadays, competition in Forex means that you can get two pip spreads in the major currency pairs, which is not too bad. But beware when the market moves quickly!
You see, if you trade with Forex or CFD companies, you are not in the real market. You are bidding in a market they make. They are in the real market and they make sure that they offset every position you take to their advantage. If you happen to hit a bid/ask in a fast moving market, and they can not offset it to their advantage, it will not be accepted. You will get a re-quote on the price.
The CFD may be illegal in the US, but there are better instruments available for the investor. For example, single stock futures (SSF) compete directly with the CFD and have a lower cost structure. Of course, international investors can access SSF products too.
I advise you to be very careful about assessing your trading costs before embarking on CFD trading. Carefully consider the alternative of trading in real markets with a transparent cost structure, where competitive pressure from thousands of participants keep trading costs to a minimum.
A key attraction of CFDs to investors is that they are leveraged instruments, but do be aware that there are many other leveraged financial instruments available to the trader.
Face it, all that CFD advertising and those free seminars must be paid for by something! Believe me, day trading is a tough business. An absolute essential is to minimize your costs. Look at every investment vehicle through the cost prism before deciding which path to take.
David Bennett trades US commodity futures from his home on the Gold Coast in Australia. He provides coaching and mentoring services for people wanting to start trading for themselves. Visit http://www.12oclocktrades.com to read more futures trading articles.
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Day Trading - 5 Important Factors You Should Know About Before Venturing Into Day Trading

Winning is not something that comes by fluke. Whatever the business that you are in, planning, patience and diligence is what gets you there, and day trading is no exception to this.
Day trading definitely is risky business, and that is why many traders fear getting into it. There are chances you will lose a huge amount of money in a second, just as there are chances you will make big profits as well. As an indication of profits you have made in the day, a green circle appears on your card, and that's what one loves to see! If you've made losses, they are indicated on your card by the appearance of a red circle, and that means bad news. If you often see these red circles, you need a new plan of action quickly.
Here are some ideas for you if you often see those reds:
Get yourself a mentor
Its great having a guru, someone who has experience in the business of the day trading. It must be someone who knows the ups and downs of the trade . He should be ready to let you in on his secrets. In addition,he needs to be an enthusiastic guide as he puts you on track..
Look for the following factors when you are getting into the business of day trading:
1. Monetary Resources. This doesn't mean you must be an extremely rich individual. You simply need an adequate capital to see you through your initial struggle. In addition, you must also have other means of income. A back up is always good when you are venturing into new territory.
2. Experience. You need a guru who can pass on some of his experience on to you. But it is unwise to rely solely on the judgments on another. Start applying what you learn to make your own decisions.
3. Personality. You must be a go getter and be bold when you enter this competitive business. It is not for the shy and the lazy for sure.
4. Knowledge Gather all possible information and useful on the subject. Get some good books and journals on the trading business. In your time off, look on the internet to get updates on the market. From the information gathered, it is important to select what applies to the stocks you have in hand.
An overload of information is way better than having limited information. Ensure that the information that you receive is applied in your trading.
5. Willingness To Take Risks If you are over cautious it may well work against you. Take a chance here and there, but remember not to go past your personal limit. The best knowledge that one can get is through first hand experience, even if it is a trial and error method.
Try your hand at different strategies to pinpoint what suits you the most.
There is a solution to every problem. If you begin trading with an attitude of positivity and have been properly prepared then you can avoid noticed red circles on the chart.
Abhishek has an uncanny insight into Trading! Visit his website www.Trading-Masters.com and download his FREE Trading Report and learn some amazing Trading tips and tricks for FREE. His tips would save you thousands and make you better at Trading! But hurry, only limited Free copies available! www.Trading-Masters.com
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Day Trading Stock Symbols - How To Decipher The Cryptic Day Trading Stock Symbols!

Ticking symbols refer to the letter system which are representative of the stocks. They are needed to monitor and find security info. It is useful if you are offering a quote because you might be asked to enter a symbol for the transaction. These numbers and letters contain vital security information
The tick symbol of a mutual fund is composed of five letters that end with an "X". A prime example is FMAGX which represents Fidelity Magellan fund and the VFINX represents Vanguard's Index Five Hundred fund. If this acts as the funds on the money market, three letters ending with an 'X' are used instead..
Stock symbols which are listed on the NYSE or AMEX exchanges consist of three bills of exchange, while the Nasdaq uses four letters. But 5 letters are made use of in the case of Nasdaq when the stock contains more than 1 issue of a common stock, where the fifth letter would have a defined meaning.
The 5th letterticker symbols and what they mean.
A for Class A, B for Class B, C for Class C except for the issuer of qualification, the new edition by D, E on deposits SEC is delinquent, F denotes foreign, the first of convertible bonds G, H second convertible bond , I third convertible bonds, J denotes voting, K denotes Nonvoting , various situations L.
M preferred shares of the fourth class, N the preferred shares of the third class, O on preferred shares of the second class, P denotes preferred shares of the first class, the bankruptcy proceedings Q, R designates rights, S shares of beneficial interest,T denotes rights or warrants, mutual fund X, Y denotes ADR also known as American Depository Receipt, with Z for various miscellany situations.
Some stock symbols seem funny to some of us. It can be confusing when you get these symbols from your exchange.
Some of these are - AFL.BO invest a football locker room, CHIC is a trends stock, and CRZY is a title which is very volatile, CTCO.NS your money is being sought by the city of thugs , GEEK do something to oppose CHIC Stock, DABU.NS Saturday night lives must be avoided or forgotten, BNCO.NS honest focuses on the management of a company by a person.
EMCO.NS more disadvantages on a identity is moving, FUN investing stocks is both fun and play, FUSEX explanation is not necessary, GASEX mutual fund which is fighting flatulent, GODD people investing directly on future sins, suggests careful HIT because a hit decisions could be held in inventory, HUMP forget pump and dumping of stocks regimes, ICSEX speech by saying that it is lot better to see people dead or make love in Alaska, investor or IMAN MAN with a skewed sex, INSEX fund a lot of movement.
LMNE short of a title, because it could go wrong, LUV expression of what's love got to do with it, NEB. As likes stocks, stocks MORE.BO make you sweat, MRB.SN company is need for a BS_er what is good, MRFIX adding portfolio of the fund during breaks, PNSEX mutual funds strange golden shower, RATL toy manufacturer baby SRRY apologies to the stocks invested, URI multiple personalities stock WMNXX money market funds favorite by playboys and WSob stocks are becoming hot like sushi.
A little research will tell you what these symbols really mean. . Be aware, at times these symbols may be modified and changed so do remain up to date.
Abhishek has an uncanny insight into Trading! Visit his website www.Trading-Masters.com and download his FREE Trading Report and learn some amazing Trading tips and tricks for FREE. His tips would save you thousands and make you better at Trading! But hurry, only limited Free copies available! www.Trading-Masters.com
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8 Steps To Become A Master Day Trader

Success in any form of trading implies that you are betting your wits against every other person in the market. Every penny you make is on the back of someone else's losses. This is also true for day, future and forex trading.
Day trading is full time job and you want to make your living on day trading in stock or currency, you need to follow followings:
1. It is unrealistic to make profit from day one in stock or currency trading. You will make mistakes and you need to learn from your mistakes. Do not get depressed if you loose money during your initial period.
2. You need to be ready while market is trending. These are great opportunity to make big profits.
3. You need to work hard to limit your losses while day trading. This is more important than make big profits.
4. You should always set yourself a limit on how much you are prepared to lose on any particular trade, and set your stop loss at that level.
5. You should have 100% confidence on your chosen method of trading. Remember that success is nothing but strong desire.
6. It's your success so learn to hold yourself accountable if things don't go the way you want them to. You should be disciplined, determined, persistent, and most of all enjoy day trading in your chosen market like currency, stock or commodity.
7. You need to do intensive study and master all the tools like charting, Fibonacci sequence, and technical analysis to become a consistent trader.
8. Best day trading tips are to manage your fear and greed.
Let's discuss more on trading psychology
The fear of loss and the fear of missing out are two fears for all traders.
If you sell stocks out of fear probably, you will fail to capitalize and recover fully on the trade.
The fear of missing out forces people to abandon their rules so that they don't lose out on another major stock move.
The best suggestion to mitigate these risks is to have a defined entry and exit criteria as a part of your trading strategy.
Other side of fear is greed. Greed comes from overconfidence. Traders need to teach themselves on how not to loss focus from their trading rules.
Day trading is like any other skill, which you need to learn and practice. Only proper study and disciplined practice can make you perfect. First, I suggest you to read an quality book like "Master Trader" to understand all the methods of day trading. You can buy Master trader on line and download it at your computer. Another smart move will be to subscribe to doubling stock newsletter. Now, you will get weekly recommendation of two hot penny stocks per week. You invest some of these recommended stocks using your own day trading rules. You can get other tips on penny stock investment at my blog on penny stock trading information.
Article Source: http://EzineArticles.com/?expert=Arindam_Chattopadhyaya

Use Multiple Contracts To Reduce The Stress Of The Exit

The other night (Australia time) I was trading wheat and found myself long 4 contracts in an erratic trading session.
Sadly, I had missed the first great breakout to the downside, and felt that the lows for the day had been made. Eventually I went long at about 944 with a target of 954.5.
Now the first thing to notice is that the very best thing I could have done is automated my exit and gone to bed! This is the strategy recommended in my eBook whereby I would have entered a stop loss order at about 942, a limit order at 954 and a market order to exit 30 seconds before the end of the session. The orders are linked in a One Cancels Other group so that only one of them ever executes.
However, on this evening I did not take my own advice, and settled down to watch the progress of the trade.
Pretty early on there was an exhilarating spike up to 951.75 followed by a distressing decline right back down to 944.5. Then we were off to the races again with a move up to 953, only to have our hopes dashed as price swooped back down to 946. Finally, after much sideways action there was another burst up to 955 before a calamitous nosedive into the close.
I do not know about you, but I hate to sit and watch a session like this!
I still say the best way to handle the situation is to automate your exits and walk away. What you do not see, you do not stress about. But if you must watch, there is something else you can do.
In this instance, I was long four contracts. When that first happy spike came, I sold a couple of them just over 950. Now, even if price declined and hit my stop for the other two contracts at 942, I am still in the black for the day.
Once I have done this, I quite enjoy watching the session. I know I cannot lose and there is a chance of quite a big win, which is what happened in this case.
Of course, I have given away some profit. If I had held on I could have sold all four contracts at 954 instead of dumping two of them cheaper. But that is a price I am happy to pay to reduce the stress of trading.
Anyway, trading is all about managing risk. The stop might have been hit today, and if I had taken no action I would have been down about a dozen points (two or three points per contract, allowing for slippage which is endemic in the wheat market). By taking the action I did, I ensured a profit of six to eight points, with the possibility of an overall profit of around thirty points.
So, without being too prescriptive, my advice to you is to trade a market where you can afford to enter positions with multiple contracts, then carefully consider what your exit strategy is going to be.
Keep in mind that you do not have to sell all your positions at once, a point that is often forgotten in the heat of battle.
For that matter, you do not have to buy all your positions at once either, but I will leave that discussion for another day.
David Bennett trades US commodity futures from his home on the Gold Coast in Australia. He provides coaching and mentoring services for people wanting to start trading for themselves. Visit http://www.12oclocktrades.com to read more futures trading articles.
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Trading Commodities - Margins

If you've been reading the newspaper lately, you've doubtless seen how much inflation has gone up over the last two years. You might be thinking, as many do, that this is likely to continue for the next two years. However, you can hedge your portfolio against inflation and maybe even pick up some profits by investing in gold.
Don't worry if you don't have $58,000 to purchase 100 troy ounces of gold at the current market price of $580 per ounce. Instead, you can buy a gold futures contract, as many speculators do. Instead of having to come up with $58,000, you only have to invest 5% of that total, or $2900.
That 5% initial investment is known as the initial margin. The exchanges and brokerage firms set the exact percentages on a daily basis. This is done per individual commodities futures contract. The exchanges monitor volatility, price and many other factors to figure out what acceptable levels of risk are. Then, they said the margins accordingly. The minimums are set by the exchange, but but brokerages will sometimes use requirements that are slightly higher.
If the price of gold rises by five dollars before the contract expires, that excellent. You've made five dollars per ounce of gold, times 100 ounces, which equals $500, excluding commissions of about $20. If you had purchased the gold straight out, you might be surprised to learn that your profit is exactly the same. However, look at the difference between doing an outright purchase and doing a futures contract in percentage terms.
$500 divided by $58,000 times 100% equals 0.86%, or just under 1%. This compares to $500 divided by $2900 times 100%, which equals 17.2%. This difference is from the effect of what is known as leverage. Even though you only invest 5% of the total purchase price, you get 100% (besides commission) of the profits, instead of 5% of the profits.
However, this is not only good with no bad. This type of reward carries risk of loss. Let's say the price had decreased five dollars and had never risen again before the contract expired. What you would have had would have been a $500 loss instead of a $500 gain.
Now, brokers have to protect themselves against the possibility of something like this happening, namely that you won't be able to cover your amount at contract expiration. Therefore, they do what's called a "margin call."
What this means is that all potential profits and losses are both calculated and settled on a daily basis. If the price drops under the minimum set by the broker, which is based upon the exchange minimum, brokers require that their clients deposit additional funds in order to bring their account back up to the level they initially had.
Now, here's the problem. Brokers may or may not give you enough time and notice to actually do that. Depending on what the price volatility is, the amount of money involved, and the quality of your relationship with them, brokers can and sometimes do liquidate your position and don't wait for you to cover.
Normally, most brokers will give you enough notice and reasonable time to cover this "maintenance margin," which is the amount needed to bring your account back up to the level they require. However, it's you, the trader, who is responsible for monitoring your own position and knowing what the guidelines are.
In addition to bringing your account back up to the previous level, you might also have to come up with even more money. Exchanges and brokers often do raise or lower the minimums they require, depending on what the current market conditions are.
Simply put, futures trading is fast-paced and puts you at higher risk in the world of commodities. It's not for everyone, but if you have a high tolerance for risk and can put additional funds in as necessary, and if you can withstand some losses as a matter of course, it might just be for you.
Visit 123OnlineTrading.com - Commodities, Stocks, Forex to find books, tips and advice about online commodity trading. Besides a large selection of free educational articles you can also find powerful books about online trading in general.
Other Resources:123OnlineCommodityTrading.com - Commodity Trading Links
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Day Trading Like A Pro

Volatility Is The Key To Day Trading
Successful day trading requires the ability to spot trends and patterns quickly, and act on them. It's tough to know which stocks to watch, but once you have learned the skill, you will be ahead of the game. You should maintain a watch list!. These are a cross section of stocks that you keep an eye on. Many stocks have recognizable patterns, and with a little experience at watching the same group of stocks , many traders can make educated guesses about whether the stock is about to move up or down. Most day traders, at least the successful ones, make trades from their watch list. There are several criteria for choosing stocks for your watch list!
Probably the most important is liquidity. I always look for stocks that trade at least 250K shares daily. If the stock isn't trading well, you may have trouble selling when you need to get out. If you can't sell the stock, you're obviously not going to make any money. I would rather trade stocks that are moving over 1M shares a day, but certainly never less that 250K. If the stock is too thinly traded, the market makers can manipulate the price too easily.
You will also want to look at volatility. Volatility is the rate at which the price of a security moves up or down. A $20 dollar stock that moves up or down by $5 in a day would be considered highly volatile. Large price swings are where knowledgeable day traders make money, and others lose money. In my opinion this is one of the most important criteria. Good stocks , at least from a day trading perspective, are volatile. Day traders make money when the price moves dramatically over a day, or a few days. Avoid high dividend stocks . We are not in this for the long term, so the dividend is irrelevant, and these stocks tend to have high prices and low volatility. There is certainly nothing wrong with dividend paying stocks , but they should be part of a long term investment strategy, not a trading medium.
Big board stocks can have high volatility and large price swings. But measured by percentage, nothing has the volatility (and risk) of pinksheet stocks or "penny stocks ". These low priced stocks trade for under a dollar, and at times can have huge volume. Some stocks make moves of as much as 100%-200% or more IN A DAY. There is obviously a tremendous amount of risk here. But you can start out with only a few hundred dollars. As long as you pick well, you can actually make money. I know people who make their entire living from trading (mostly) penny stock.
Put together a list of 30 - 50 stocks , get to know everything about them. What market factors affect their movement. What news items cause them to move up or down. This is your stock farm, cultivate it. Once you know what moves your stocks , you will be able to trade like a pro.
Chuck Hoskins is a frequent contributor to http://www.TheArticleShare.com
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Trading Psychology - Fear And Greed

No matter what system and tools are available to those who are day trading online, true success in trading still relies on the psychological strength of the individual trader. Day trading is a system based on rules, but as charts are analyzed and prices fluctuate, traders may find that they have a difficult time sticking to those rules when fear or greed become involved in the analysis. Successful traders are able to buy despite feelings of fear and sell despite feelings of wanting to prolong the holding of a stock.
A confident trader will still take the time to test and re-test a stock. At first glance a stock might look like it's in top shape and performing as expected, but a successful trader will not solely rely on first glance appearances. Those who day trade stocks know that in an instant the market can change and it's important to stay abreast of company information as well as market news and conditions. A successful trader will stick to the rules set up in day trading systems to ensure that his or her reactions remain unbiased throughout the trade.
Effective day trading strategies focus on providing consistent and disciplined actions. Successful traders have a consistent approach to the market and trading. They will take the time to systematically build up their own trading system that takes into account their own personal elements of risk control and they will take the time to stick to their original trading plan. It's not that traders shouldn't make changes based on market information, but that the changes made should be based on established trading rules that help traders determine what their entry and exit points on a trade should be.
Some of the best day trading tips that a trader can get help them deal with fear and greed. Many traders find that they may be able to memorize the rules and familiarize themselves with knowing how to accurately interpret stock charts, but they also need to learn how to prepare themselves to deal with fear and greed.
Fear in trading primarily takes on two basic forms - the fear of loss and the fear of missing out. The fear of loss leads to selling stocks prematurely and as a result, they aren't able to capitalize and recover fully on the trade. When they start to enter into trades, the trade isn't given enough time to mature and the trader sells so that more isn't risked.
The fear of missing out is another form of fear that compels people to abandon their rules so that they don't lose out on another major stock move. These fears need to be dealt with because they will impact a trader's entry and exit decisions.
Greed is the motivation for over-confidence. Dreams of "making it big" in trading can cloud a trader's perspective. Again, they abandon the rules of their trading system in the hopes that more money will come their way. Traders need to learn how to deal with greed so they can maintain their focus and not have their thoughts be swept away with illusions.
Manny Backus is an expert at helping day traders make hundreds or thousands of dollars within just the first hour of the trading day. Visit Day Trading Pro, http://www.daytradingpro.com/ for more information.
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Support And Resistance Technical Analysis And Day Trading

Let's start with a definition of support and resistance. Support is an area of accumulation where the price of the stock is cheap enough so that people buy more (accumulate more) of the stock. Resistance is an area of distribution where the stock is at a price that traders deem to be too expensive or when they want to protect the profits they have earned, so they are encouraged to distribute or sell their holdings.
Traders who are able to successfully determine areas of support and resistance have the ability to potentially profit from market movements. Fear and greed are the two major driving forces for market movement. Those who are day trading online know that while there may be many reasons for purchasing and holding a stock, the overall market movement is based on human instinct. With that in mind, styles of trading such as day trading, swing trading and momentum trading all utilize support and resistance analysis for potential market gain. Here are some day trading tips to help you identify areas of support and resistance.
1) Identify a strong area for support or resistance.
Traders who are day trading stocks should look for the number of times that a support or resistance line has been tested. For example, if a stock has been at $40 eight times in the past six weeks and has also been at $45 three times during the same time frame, the stronger line is at the $40 price.
2) Identify horizontal and diagonal lines of support and resistance.
Traders may easily see horizontal lines of support and resistance, but they should also know that identifying a diagonal trend helps to forecast upward or downward movements of the stock. For example, the price might fluctuate daily, but if over an eight week period the price moves from $40 to $41 to $43 to $44 to $45 and so forth, traders are able to see a very apparent upward trend in stock price.
3) Identify when a support or resistance line has been broken.
If the stock prices falls below or climbs above the support or resistance line, the trend of the stock has changed. The stock might become bear, bull or neutral and day traders may need to rely on other indicators that are part of their day trading strategy to determine what action to take concerning the stock. A quick tip to help you identify if a trend change has occurred is by looking at the amount of the price difference between the support or resistance price and closing price. If the closing has at least a three to five percent difference from the support or resistance price, then most likely the line has been broken.
Support and resistance are important aspects of many day trading strategies. As you get more familiar with identifying these lines, you will strengthen your trading system and have greater potential to capitalize on market movement profits.
Manny Backus is an expert at helping day traders make hundreds or thousands of dollars within just the first hour of the trading day. Visit Day Trading Pro, http://www.daytradingpro.com/ for more information.
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