Day trading - how does it work
		


		what is day trading? It's really about closing ALL trades before the market
		
		closes. The main benefit of day trading is LOWER RISK because you have no
		
		over night position that could be subject to company BAD NEWS. Bad news can mean
		
		that prices open the next day much lower than your stop loss.
		
		On the positive side as long as there's plenty of movement and a wide price range
		
		like the dow jones 30 or s&p 500 you can profit from daily trends that last from
		
		several minutes to several hours.
		
		Who should day trade? Because the trading signals can be very frequent, it can be
		
		high risk especially if you don't have a tight stop loss in place. You should try
		
		to ride the trend that last several hours to make the most money within the time
		
		available. This type of trading should use about 10-20% of your total investment
		
		money because you lose every penny. Each trade should ideally risk only about 2%
		
		of that 20% with a profit target of 4-6%.
		
		Where can you daytrade? Spread betting firms have plenty of day trading options,
		
		also discount stock brokers. The main problem to watch for is trading costs or 
		
		execution costs which can mount and even not make trading worth it. Obviously the
		
		more trades you make the higher the cost, so it's better to follow longer trends
		
		that last a few hours than trading patterns that last a few minutes. Also market's
		
		can move VERY FAST which can cause SLIPPAGE. Try to avoid trading just on news
		
		that moves the markets like interest rates because you can get caught out on the
		
		wrong side of the market. Make sure your an historical expert on such moves in the
		
		past, study and learn.
		
		Why day trade? well, you can make a great deal of money very fast if you know what
		
		your doing with daytrading. Market makers can easily clear over $100,000 within a 
		
		few hours. Obviously traders at home make less, but if you stick to a simple system
		
		that gives you an edge, that rides the daily trends that form and last a few hours
		
		with a tight stop loss, you have a good chance of making money on a consistent basis.
		
		The Mastertrader ebook is packed with profitable trading information.  
		
		MasterTrader eBook