Inside
the Day Trading Revolution
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How Do I Get Started?
Proceed with caution. A wise strategy
would be to spend some time each day studying on-line information
and evaluating techniques and strategies. Once you feel reasonably
comfortable with the basic underlying trading concepts you
should begin to trade fictitiously. In other words, don't
quit your current job. Make and record your trading decisions
without using real money. Keep track of your results and tally
up your gains and losses at the end of each trading session.
As long as your losses exceed your gains you should refrain
from putting in any real money. E*Trade offers an interesting
and unique on-line trading game that can help you get started
without investing any real capital. If and when you get to
the point where you are consistently able to generate gains
and minimize losses, then you may be ready to start conducting
some actual trades. Keep in mind the advice that you should
never utilize money for trading that you cannot afford to
lose.
Once you are sure that you understand
the risks of Day Trading and are interested in trying your
hand at it we recommend that you begin on a part time basis.
If you are able to maintain a steady income apart from Day
Trading you will minimize your stress and financial exposure.
This may require that you change your hours of work so that
you may take advantage of the prime day time trading hours.
While there is a significant movement afoot to extend the
trading hours of major exchanges, at this time most trading
opportunities exist during normal trading hours.
Your first step will be to determine
if you will affiliate yourself with a trading firm that specializes
in Day Trading or if you will attempt to conduct on-line trades
from your home on your own. At this point, there are still
numerous mid-sized cities in this country that are not served
by Day Trading facilities. Many serious Day Traders make the
decision to relocate to a location where they can go to work
each day in a trading room. This is a major step and should
not be undertaken lightly. However, if you are truly determined
and have few attachments, it is an option. Many Trading Firms
offer professional home based programs. The bundle of services
offered to home based traders are similar to those provided
in their trading rooms. Review our listings of on-line resources
for more information.
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Included in our resource links are
a number of firms which specialize in training and seminars
for Day Traders. It is important that you learn all you can
prior to entering this industry. Some of these can be quite
expensive. You would be well advised to conduct significant
personal research by utilizing on-line and traditional resources.
Do not rely on a single source for you information. Gain as
broad a prespective as possible.
As you evaluate potential trading
firms and brokerage houses, ask a lot of questions. Compare
costs and services provided. There has been significant price
pressure on electronic brokerage firms in recent months -
a trend that is likely to continue. Some of the cheaper firms
are offering prices as low as $5 or $6 dollars per transaction.
This compares to traditional fees in excess of $25 per trade
for larger full service firms and $15 or so for discount firms.
Remember that commissions will be a significant factor in
the profitability of your trading activities.
Being a professional Day Trader
requires a unique personality. It demands a high degree of
discipline and an ability to live with the intensity and pressures
of the trading room day in and day out. Over time this can
become quite grueling.
Increasingly, many Day Traders,
burned out by the pressure and disenchanted with the short
term and inflexible nature of the Day Trading system are opting
to trade from their homes on a part time basis. By executing
fewer trades, these traders save money on commissions. And
by having the flexibility to wait a few days or even a few
weeks for the price movements they require to turn a profit
on their stock holdings, they relieve themselves of the intense
pressures experienced by true Day Trading professionals whose
objective is to close out all of their positions by the end
each day.
A Day Trader's life revolves around
a computer screen - the link to real time information. Day
traders live and die by information. Decisions are made on
the basis of small and seemingly insignificant fluctuations
in the price of their holdings. Therefore, if you intend to
trade on-line from your home you will need to equip yourself
with a good computer system. It doesn't have to be fancy or
expensive, but it should be equipped with a high speed modem.
You will also need to have a host of information resources
at your fingertips. Some of this information is free - some
requires a subscription. Be selective in what you subscribe
to initially. You will come to learn over time what is valuable
and what is not.
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