Day trading refers to a practice of buying and selling a security within a day. This can be seen at various marketplaces but it can be most often seen at stock markets and foreign exchange (forex).
A day trader is someone who capitalizes by carrying out long and short volume trades on the fluctuations in the market price action.
Day trading is indeed a lucrative career but also a challenging one. Before a trader enters in the market, they should be equipped with the knowledge of the trading world and possess risk tolerance ability along with a good amount of capital and a clear goal.
Trading psychology refers to the mental state of a trader during the time they spend in the market. It’s one thing that can determine the success and failure of a trader in the financial market.
Developing an effective trading brain involves a personality modification and people who don’t bother to attempt this shouldn’t go for trading
Getting the right mental makeover is not an easy task and not many traders manage to have it. However, certain traits like emotion-containing, quick decision making, and exercising trading discipline can be inculcated in an individual to move towards the right mindset.
Day trading involves buying and selling a ‘financial instrument’ within a single day. Various types of instruments are available in the market for traders to make use of. These instruments are capable of creating wealth for a trader if used correctly.
A stock represents the ownership of a portion of any corporation. Depending on the amount of stocks that an investor owns, they are entitled to the same proportion of profit. Stocks are measured in terms of ‘shares’.
Futures are contracts that necessitate two parties to make a transaction over a certain asset at a particular time and date. The seller and buyer must sell and buy the asset at the set price, irrespective of the current market price at the expiration of the contract.
Currencies are traded in pairs, say USD/INR i.e. US dollar and Indian Rupee. For, example if the associated price with the pair is 74.38 which means it’s going to take 74.38 rupees to buy 1 US dollar. Traders speculate on the price movement of the currency and trade currencies to create profit.
Options trading can be compared with betting on the horses at the racetrack. So, the chances of either winning all the profit or losing it all are one of the key features of futures trading.
A trading order is an order requested by an investor to buy or sell a security in the financial market. It is general executed through a brokerage service that helps a trader to make a transaction at the best available price.
Trading software helps day traders to carry out day trading activities in a timely and efficient manner by automating the analysis and entering the trade by itself when there is a fluctuation of price in different markets.
A market order is a request by a trader made to the brokerage to buy or sell a financial security.
