I have been a day trader for a while and see a lot of sites focused on getting your money to day trade with them.
Many of these sites are focused on day trading stocks, which I do not understand.
I believe that stocks should be treated more as an investment than a trade.
* · To understand a particular stock you need to know a lot about the underlying company and the industry before choosing to buy or sell.
* · Day trading is different from investing.
You should focus on one product at a time and become an expert.
If you are trading stocks there would be many days with very limited opportunities.
* · Trading equities requires you to put all your money in at the time of purchase, which means that you need more capital to start.
For these reasons I suggest trading futures if you want to be a day trader.
If you want to hold longer (but still short term) I would consider options, because there is protection built in so you do not have to constantly monitor your positions.
Here are the reasons I would choose to day trade futures instead of stocks: * · You do not need to be an expert on the fundamentals.
Futures trading is based on momentum and technical analysis (understanding charts).
It does take a lot of studying to understand the intricacies of charts and technical tools, but to really understand what is going on with a stock it takes a lot of experience in an industry or a lot of higher education.
There are many futures trading training courses on the web site, some free such as the CME site and others that cost.
* · There are always opportunities.
Once you learn the technical's you will see opportunities throughout the day to buy or sell and make money.
* · You can buy or sell easily to enter a position.
Selling is equivalent to shorting.
The market in most products is very liquid and you can get filled quickly at the price you want.
* · There is leverage in futures.
You can choose whatever product you want (stick to one at a time) to become an expert in and they all offer leverage.
For example the e-mini S&P is leveraged 50:1, so a 1 point move is worth $50.
The e-mini S&P moves by 1/4 in the futures so each 1/4 point is worth $12.
50.
The mini-Dow is $10/tick, so a 100pt day in the Dow is worth $1,000.
Oil is also $10/tick, but is moves in cents, so a dollar move in oil (a very common occurrence) is worth $1,000.
Ø Realize this can work against you as well.
A bad day is exacerbated by leverage.
* · The upfront cost is less than trading equities.
When you open a trading account you deposit money which gives you buying power.
There is no upfront cost to buying or selling a future, gains or losses are added or deducted from your account when you exit the position.
* · The trading cost are less.
You can trade equity index futures many places for less than $5.
00/round turn.
A discount stock broker would be around $5/each side for a total of $10.
00.
Day trading is not a get rich quick scheme it is a job and should be considered as such.
You will hear a lot more about peoples successes than failures because nobody wants to talk about failure until they succeed.
You need to learn as much as you can about technical analysis before trying to day trade.
Most brokers have live futures paper trading platforms that you can practice with before trading your own money.
I would suggest paper trading for about a month before risking your own money.
What do you have to lose.
I have written a couple articles on other sites about trading futures, futures trading training and about what options are.
Here is a link: www.
squidoo.
com/erwFutures
Many of these sites are focused on day trading stocks, which I do not understand.
I believe that stocks should be treated more as an investment than a trade.
* · To understand a particular stock you need to know a lot about the underlying company and the industry before choosing to buy or sell.
* · Day trading is different from investing.
You should focus on one product at a time and become an expert.
If you are trading stocks there would be many days with very limited opportunities.
* · Trading equities requires you to put all your money in at the time of purchase, which means that you need more capital to start.
For these reasons I suggest trading futures if you want to be a day trader.
If you want to hold longer (but still short term) I would consider options, because there is protection built in so you do not have to constantly monitor your positions.
Here are the reasons I would choose to day trade futures instead of stocks: * · You do not need to be an expert on the fundamentals.
Futures trading is based on momentum and technical analysis (understanding charts).
It does take a lot of studying to understand the intricacies of charts and technical tools, but to really understand what is going on with a stock it takes a lot of experience in an industry or a lot of higher education.
There are many futures trading training courses on the web site, some free such as the CME site and others that cost.
* · There are always opportunities.
Once you learn the technical's you will see opportunities throughout the day to buy or sell and make money.
* · You can buy or sell easily to enter a position.
Selling is equivalent to shorting.
The market in most products is very liquid and you can get filled quickly at the price you want.
* · There is leverage in futures.
You can choose whatever product you want (stick to one at a time) to become an expert in and they all offer leverage.
For example the e-mini S&P is leveraged 50:1, so a 1 point move is worth $50.
The e-mini S&P moves by 1/4 in the futures so each 1/4 point is worth $12.
50.
The mini-Dow is $10/tick, so a 100pt day in the Dow is worth $1,000.
Oil is also $10/tick, but is moves in cents, so a dollar move in oil (a very common occurrence) is worth $1,000.
Ø Realize this can work against you as well.
A bad day is exacerbated by leverage.
* · The upfront cost is less than trading equities.
When you open a trading account you deposit money which gives you buying power.
There is no upfront cost to buying or selling a future, gains or losses are added or deducted from your account when you exit the position.
* · The trading cost are less.
You can trade equity index futures many places for less than $5.
00/round turn.
A discount stock broker would be around $5/each side for a total of $10.
00.
Day trading is not a get rich quick scheme it is a job and should be considered as such.
You will hear a lot more about peoples successes than failures because nobody wants to talk about failure until they succeed.
You need to learn as much as you can about technical analysis before trying to day trade.
Most brokers have live futures paper trading platforms that you can practice with before trading your own money.
I would suggest paper trading for about a month before risking your own money.
What do you have to lose.
I have written a couple articles on other sites about trading futures, futures trading training and about what options are.
Here is a link: www.
squidoo.
com/erwFutures