Home Business Ideas
Becoming a Day Trader
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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