Day 2 – Day Trading for non-Day Traders
After my initial post yesterday, a friend of mine on google plus email to say she is interested to know what I am writing about but she has no idea what Day Trading is about. So this article I will attempt to simplify Day Trading as much as possible.
Day Trading is similar to Stock Brokering.
A Stock Broker buy and sell stocks/shares on the Stock Market. He usually buy and wait for a longer period of time before offloading it to make a profile. Time frame can be from a week, a month, 6 months even years before he sells.
A Day trader usually does all his buying and selling within a day or when the stock market opens and closes with the 8 hour period. The profile may seem small, but if you dealing with large sums of money or making a lot of trade within a day…..it could turn out to be a handsome amount.
It is not difference to an umbrella seller on the street selling umbrellas he bought in a shop. But resells it with a markup during a rainy after. The concept is the same. Buying at a lower rate and selling at a higher rate to make a profit.
What do Day Traders buy or sell??
So you ask me……what so demanding the Day Traders can buy or sell continuously in a single day?
Day Traders like Stock Brokers trade financial instruments. These stocks, options, currencies and some futures contracts such as equity index futures, interest rate futures and commodity futures. These financial instruments are traded every single working day except the weekends.
But for the purpose of this exercise and our learning, we will focus only on one financial instrument which is currency. We will study and attempt to buy/sell Foreign Currency or FOREX for short.
Thanks all for today………tomorrow we will look at what foreign Currency (FOREX) is and why a lot of traders like this market.