How does a 'day trader' make a living?

Question

I have heard of them but how exactly do they make a living and by what methodas do they use to make decisions.

I am not a day trader but i have been known to make books on sporting events and I do enjoy the buzz of pitting my wits against the bakers. Therefore I wwould like to go into that field and try it before I get to old to be bothered with the hassle of competing.

Answer 1

I hope that these links will help to becoming a 'Day Trader':

Wikipedia: 'Day trader'
http://en.wikipedia.org/wiki/Day_trader

Wikipedia: 'Day Trading'
http://en.wikipedia.org/wiki/Day_trading

About.com: 'Becoming a Day Trader'
http://daytrading.about.com/cs/educationtraining/a/becomeatrader.htm

About.com: 'Day Trading'
http://daytrading.about.com/#b

AskMen.com: 'How To Become A Day Trader'
http://www.askmen.com/money/investing_100/135_investing.html

Day Trading World:
http://www.daytradingworld.com/

Daytrader's Bulletin:
http://www.daytradersbulletin.com/

Answer 2

A car salesman could take a car onto his lot and sell it the same day, and be termed a Day Trader.

There are Day Traders in stocks, commodities, futures, debt instruments, money markets, essentially every market you can think of. I'm a Day Trader in the Forex. None of my trades this month have lasted more than 20 minutes. And yes, some of us do make money. But very few.

I'm not sure why it's so hard to understand how to make money trading. You buy low and sell high, or sell short high and buy it back lower. What's to understand?

What methods do you use to make decisions?

Answer 3

The official definition of day-trading is buying and selling the same security within the same day. You can do it as many times as you like. But if you do it more than 3 times in 4 or 5 days, you get labelled a "pattern daytrader", and there are margin requirements for being such.

Daytraders typically attempt to exploit short-term directional movements, and use various technical approaches to identify candidates. If you can buy a stock and sell it for 50 cents or a dollar higher in an hour or two (or less), and limit your losses on positions that go the other way to less, and have more gainers than losers, you can come out ahead.

Alternately, if there is a significant spread between bid/ask you can place buy and sell limit orders within the spread.

All in all, it is not for the faint-hearted. You can't get greedy (who cares if a stock goes up another dollar after you sold it for a dollar gain), and you have to be quick to sell when you find yourself on the wrong side (i.e., you don't wait for it to turn around and come back).

Answer 4

Basically you buy and sell stocks over short intervals, usually less than a day ,in they belief or hope the will move in the right direction for you. As with most stock trading it is a zero sum activity; that is the value gained equals the value lost. I believe the statistics show that only 10% of day traders succeed, which means 90% fail or become bankrupt. Unless you are a very accomplished gambler it's a game for suckers.

Answer 5

well day traders are not inverters.... they look to take a small piece of the market and do it often there are 3 things that you need to remember if you enter this arena 1) cut your losses fast 2) let profits run 3) only trade set ups that are in your plans . The biggest problem that traders have are them self ....not losing trades not the markets.. it there emotion that blind them its call fear and greed . All that have ever traded have run into this.Yes its true 90% lose money but so doesn't college cost money so one need to learn to control emotions before he has lasting success.I would say 90% of all books that teach how to trade will work the trouble is traders do not fallow the rules

Answer 6

A day trader makes profits on the intra-day price fluctuations of market. For example, most people will buy a stock and wait for it to go up in price and then sell it. They could hold it for several days, weeks, months or years. Day traders do not hold positions overnight.

Another example is futures traders. On Friday, 7/28/06, the Dow had a trading range that day of 11,102.03 to 11,243.31, a range of 141.28 points. A day trader trades the price fluctuations during the trading day.

Answer 7

If you make informed decisions and approach your penny stock investments with the same thoroughness that you’d use in your other investments, you too can unlock a whole lot of profit potential. Learn here https://tr.im/dEq7d

It’s absolutely true that penny stock investors can make very quick gains. Synutra International, Inc. (NASDAQ: SYUT) is a great example of a penny stock. This dairy-based, nutritional-products company has jumped from a little Bulletin Board operation to a billion dollar corporation. The company finally graduated from Over-the-Counter status to the NASDAQ Stock Market bringing with it 113% gains in less than two months.

This happens all the time and it’s how some of the best investors in the world became the richest investors in the world. Buying some shares for pennies on the dollar and selling at $10 or $20 is possibly the fastest way from being a hobby investor to a super investor

Answer 8

go to www.stockcharts.com and study, study study. it is not as easy as a few steps. Day-trading seems romantic and profitable, but long term trading will probably net you better long term results. One of the biggest keys to trading Stocks or commodities is that the market moves down 3 times faster than it moves up. Taking a position in the market expecting (hoping) for it to go up is also know as being long or bullish i.e. bull market. this is also know as buying.

Taking a position expecting the market to go down is known as being short or bearish. this is also known as selling, when the stock or commodity is going down it is a bear market.

The reason they are called bear and bull markets are that when a bull fights, it pushes up with its horns, and when a bear fights it pushes down with its paws.

The biggest key to trading is to practice on paper for a minimum of a year. you can make allot of money trading stocks or commodities, but you must know what affects your markets, whether it is a commodity or a specific stock. pay attention to the charts, (this is called technicals) and learn about the fundamentals which is news, weather, supply and demand etc. Always remember, you must anticipate the market, not react. if you make a decision on what you hear on the news it is too late.

Trading is alto of fun, but it is not a hobby, it is something that you should take as seriously as you would in any career. If you are serious you can succeed, if you are just trying to get rich quick, try something else.

Answer 9

It's a bit like gambling. They buy stocks and shares and hold on to them waiting to see if they rise so they can sell and make a profit . Something along those lines my friend !

Answer 10

the best trading software http://tradingsolution.info
i have attended a lot of seminars, read counless books on forex trading and it all cost me thousands of dollars. the worst thing was i blew up my first account. after that i opened another account and the same thing happened again. i started to wonder why i couldn,t make any money in forex trading. at first i thought i knew everything about trading. finally i found that the main problem i have was i did not have the right mental in trading. as we know that psychology has great impact on our trading result. apart from psychology issue, there is another problem that we have to address. they are money management, market analysis, and entry/exit rules. to me money management is important in trading. i opened another account and start to trade profitably after i learnt from my past mistake. i don't trade emotionally anymore.
if you are serious about trading you need to address your weakness and try to fix it. no forex guru can make you Professional trader unless you want to learn from your mistake.