|
Free Trading Practice Platform |
|
Popular Topics
|
 What is day trading?
Day traders
buy and sell the same stock
(or other investment type) within a single trading day.
Day trading has become very popular among traders.
It can be very profitable - you can make thousands of dollars
in a very short amount of time. On the other hand, you can
lose that money just as quickly.
One of the main challenges for a day trader is that stock prices usually
change very little throughout the day. In order to make
a sizeable profit, you must put large amounts of money into
the stock.
Most stocks only fluctuate 1-2% every day. So
if you put $1,000 into the stock and made a profit of 1%,
that would only be $10. Now if you put $50,000 into the
stock, you would make $500. That is where the danger in day trading lies, however.
Let's say the company suddenly reported bad news
or something major happened in the financial world and your
stock drops 8%. You just lost eight times your normal profit
of 1%, which would be $4,000 on a $50,000 investment.
Below is an example of a stock's chart towards the end of a trading day.
You can see how different patterns emerge
in the chart, even in just a few minutes. A
day trader can make decisions based on these price movements.
Stock Trading Games to Become a Day Trader
Being a day trader can be fun and exciting but just remember that the risk of losing a lot of money in
the stock market in a short amount of time is
quite possible.
We recommend that you practice day trading with virtual money
first, using a free stock trading trading site like ours, to get a feel for what's possible. Then try out being a day trader in real life with a small
amount of money. That will give you practice for handling the emotions involved in winning and losing real money in day trading.
|
