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Becoming a Day Trader - Day Trading Business

 

 

The stock market is a volatile beast. You can be up thousands one day, and down thousands the next. It is a stressful industry, it is not for the faint of heart, but for those who succeed, it is the best industry in the world. A day trader is someone who buys and sells stocks, options, futures and more in a single trading day, so that all positions will be closed before the market close of that particular trading day. The amount of trading that an individual can do ranges from a few stocks a day, to hundreds of orders a day.
 

 


The Concept


This is a full time job that takes a great deal of time for the individual interested in day trading. In terms of day trading and being a day trader, there are two types; institutional day trader and individual day trader.

 


An institutional day trader is someone who works for a large financial institution, has a lot of resources, tools and equipment to be successful in the industry, while an individual day trader works for themselves, often alone. They use their own capital, from loans in some cases, to use on the stock market in day trading activities. However, there are laws that restrict how much of other people’s money a day trader can manage. As well, in the United States, day traders cannot advertise themselves as advisors or financial managers. Typically, most day traders will use direct access brokers because they are fast and allow direct access to exchanges and trading platforms. The individual day trading boom hit in the mid-1990s with the advent of personal computers and the internet offering fast, online trading at low costs.
 

 


Startup Costs
Startup costs for this can be a lot, or very little. Depending on how much an individual wants to get into the market, they can use only a bit of money to start small and hopefully build from that, or they can use big money from loans and others to hit things off big time on the market.

 


It is important to remember that lower funds at the start give lower risk of losing everything, while higher capital gives higher risks but higher rewards initially.
Typically, you will want to have at least a few thousand dollars to get into your day trading career. Anything less will yield rewards that are simply too small, anything too big will yield greater loss risks.
 

 


How to Market It


There really is no marketing to being a day trader. If you are going to be part of an institution, then you simply need to have the experience to get hired and that will come from economics classes at a university. However, if you want to be an individual trader, you can do so simply from your home computer, using nothing but a credit card. You won’t be looking for clients in this case, but simply using your own money, or that of a lender’s, to gain the capital you need initially.


 

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