How to do day tradingDay Trading involves buying and selling the instruments be it stocks or futures or options, whatever the instruments in a single business day. The traders buy and sell on the same day; they do not keep the positions for the next day. Day traders generally do lot of trades as compared to positions traders who may buy and keep for long time. Day traders buy and sell generally in small quantities and they make money on every move either it is going down or going up. If they think that market is going up, they buy and sell in a short time, when they think that market is going down, they short the market, meaning they sell and buy. So essentially they do not care whether the market is going down or up, what they essentially care is that the market should move rapidly and should show good volume.


Who does day tradingDay Trading is done by people who have years of experience and who have very fast trading systems and very fast methods of picking up a good trade when they see it. They know for that particular day what types of stocks are involved and what stocks or index moves for that particular day. For example, energy stocks will move when say the Energy ministry is going to raise the price of fuel. The traders anticipate and essentially grab this kind of news and trade these kinds of moves. They generally make a lot of money trading these moves.


What are risks involved Since the duration of the trade involved is short and the day trader is generally a restless person, he does not wait for years or months for his stock to move. He wants to see the market move in his direction of prediction. He takes only few points on his trade but generally a profit.

Likewise he does not like to see the stock moves in the opposite direction of his predictions. He will generally place a stop loss and stop the order. He does not mind a small loss and also he does not wait for a big profit. He gets only a few points out of his trade, but he makes it consistently. That is the essence of this game.What are the results of taking the risk so how much money does he make on his trade if he not going to take many points from his trade. Day traders essentially make a lot of money that the average trader. But the day traders also lose lot of money in doing the transaction. He needs to pay the broker or the dealer out of the small margin of money he makes. Generally this is loss for him. But they make more money out of the market than the investors who generally have more time on his hands.


Traders risk appetite pays more for his risk. Is it suitable for all people the truth is good traders make hundred times more money that average good traders who are not day-trading. Also another bitter reality is ninety five percent of the day traders who are average traders or amateur traders lose money, because they do not understand the rules of the game, Many people play the game for the fun of it. Some big FII also participate in this type of day trading. They have huge money and they can take some risks for doing this.


Generally it is due to the big market players that the market moves up. Many pension funds and domestic mutual funds are also involved in day trading. So the collective mentality of all the people settling their traders in the single cycle is what makes the market move in up or down direction. This is what the crux of day trading is.Do they really make money doing day trading the day traders really make a lot of money and the substantial amount of money is due to the small and consistent many trades that they participate in. Even if they do get few points out of the market consistently and they adapt to this approach, and make a lot of money.


The advantage for the retail segment of people is that the brokerage for day-trading is too low, that is, where they can make enough money. Some restless cannot people wait for a month or week to make money. Some scalpers make money in less than a couple of minutes. So day trading average for a good trader should be 80% win and 20% loss during the trading he makes during the day and as said they will make a lot of money doing this consistently.Very big traders are said to make huge amounts of money within few seconds. This is done through day trading in equities or stocks or futures. Stock options also involve some amount of day trading activity. These factors make the stock market attractive.So, for the restless traders swing trading and day trading offer the best and attractive alternatives for making fast money. Also with a caveat added that they need to understand the technical indicators too well.