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The Benefits of Day Trading

Day Trading

There are many, many benefits to day trading. You can stay at home, sit at a nice desk and make money from your own computer, without commuting, taking the train, dealing with a terrible boss or annoying co-workers. Plus, you get to make decisions every day that have the power to make your life better. Day trading is pretty powerful.

When the market moves, it is always good for a day traders. Volatility means more big movers during each market sessions, which means more opportunities to make money on these big movers. The trick is learning how to take advantage of these opportunities in real time.

The way to learn how to do that is to get involved with a day trading education site. Yes, you can jump into the world of day trading and learn as you go, but that method is pretty expensive. You can learn risk management, day trading strategies and how to implement them into your daily trading, but quite possibly at the cost of your life savings.

Many day traders have learned just like that: the hard way. Years of testing out trading strategies and chasing bad trades down a profit-eating rabbit hole. And they learn their lessons. In fact, some of those traders become so good, they can make $100K in a couple months, after starting with $583 in a trading account. But the best of them go on to start education sites, where you can pay to learn from their hard knocks.

If you want to learn how to day trade, the best way is to learn from veteran traders. Either in a day trading chat room, where the vets are chatting back and forth about the day’s hot stocks or telling old war stories. Or you can take classes taught by veteran traders that have been through the market day after day, with the profits and scars to prove it.

One of the keys to this day trading education, though, is to spend time in a day trading simulator, which will get your skills up and running. You need to learn how to implement day trading strategies in real time.

Let’s take a second and look at a sports analogy: If you just started playing golf and you took a few lessons, could you get right out and play in a local tournament? Without spending a few dozen hours at the driving range and out on the course practicing? Of course not. The same hold true with day trading.

Once you take the classes and learn how to apply momentum trading techniques and how to spot gappers, you need to get yourself into a trading simulator. A real-time simulator that mimics how the stock market works, right down to Level II quotes and trade executions. Paper trading is a way to build up your skills in a safe environment and not risking your nest egg. It is a place to make mistakes and really learn risk management.

At Warrior Trading, you can start with $100K in buying power, which means you have the ability to make really stupid trades and to learn from your mistakes while not losing your rent money. The trading simulator at Warrior works just like a real brokerage account. So you are working in real-time conditions. And, you get to learn how to read advanced charts in real time. That is one of the keys to effective day trading: Being able to spot trends quickly and jump on them right away. Time spent in a simulator is essential to building that skill set.

After you stick with a bad trade past the stop-loss point in a trading simulator, you really learn plenty about risk management. You learn that every trade you make starts with setting a stop-loss amount and that you need to stick to that stop-loss. For example, if you make a dud of a trade and you lose $50 and your stop-loss is $50, get out of the trade. Do not stay in it hoping for a rally. You will not make back your money and you will just lose more money.

One of the best things you can take away from this article is this: there is always another trade. That is how you measure yourself. By profit-loss ratio. Not by that one trade that you loved, but it tanked.

So, once you have decided to make the leap into day trading, do it right by going to Warrior Trading. They have the trading veterans, paper simulator and proven strategies that will help you make real money in the real world.

Melissa Thompson writes about a wide range of topics, revealing interesting things we didn’t know before. She is a freelance USA Today producer, and a Technorati contributor.

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