Thursday, August 28, 2008

As Stated Before, Day Trading Can Be Risky

Category: Finance.

Although Stock Day trading has been said to be controversial and risky by many, there are still those who are able to successfully profit. Actually, one should be cautious about any type of investment and trading.



Should one be cautious about Stock Day trading. ? When you complete an entire stock transaction within one day, this is considered day trading. So what are some of the criteria that day traders might look for in the stock? Some traders actually consider it to be less risky, because there are no trades that are held overnight. Right off the bat I d say that they d look for a certain amount of volatility and also a certain amount of liquidity. As stated before, day trading can be risky.


Day traders typically look for stocks that fit into a number of criteria, that criteria might include stocks, which move a certain amount or have a certain amount of volatility throughout the day as well as stocks that are highly liquid allowing daytrader to get in and out of a transaction with ease. But the truth of the matter is that all trading can be risky. The promises of huge an easy returns coupled with some greed and inexperience has left a bad taste in the mouth of some who have been involved in day trading. The SEC pays close attention to day trading, because there has been so many instances in which traders have lost large sums of money. Some have thought that day trading was actually something which was unethical or illegal. Day trading has simply come under the scrutiny of the SEC, because it can be risky. couple that with the fact that there are so many advertisements out there for day trading get rich quick schemes that are very misleading. But this couldn t be further from the truth.


Some are simply flat- out false. Using money that was meant for another purpose or that would affect your lifestyle if you lost it is almost a certain recipe for disaster in day trading. It should go without saying, that you should absolutely only use risk capital when day trading. You ve probably heard the expression" scared money never wins" . Take your time when getting involved in the exciting and profitable world of day trading. This simply means that trading with money that you can not afford to lose most certainly increases the chance that you will lose it.


Remember that even thought day trading may be short- term in nature, your overall objective should be to profit and prosper over the long haul.

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