Income Sources From Day Share Trading

There are still a number of expert traders out there who claim that it is impossible to make money day trading. As a person who relies on day trading for my income, this claim always surprises and saddens me. Make no mistake, day trading is no soft option. It is tough, competitive and unforgiving of mistakes. But, if day trading is your dream, it can be made to work for you.

Most successful traders find a niche which suits their temperament and which they become good at. In the process of doing this they may try different vehicles and strategies which are unsuccessful. However, because they fail in a particular area, it does not mean that it is impossible to make money in that area. All it means is that the trader was not good enough when (s)he tried it.

For example, there is not much that you could teach me about various option strategies. Theoretically, I know how to make a lot of money with options, but in practice it never worked out for me. Buying out-of-the-money options does not have enough winners for my temperament. Selling way-out-of-the-money options has plenty of winners, but really high stress levels on those few occasions when the options flirt with the strike price as the expiry date approaches. Multiple option strategies look good, but trading costs always seemed to kill my trades.

That said, I do know traders who do well with options, so obviously money can be made if you have the right strategy and temperament.

Fortunately for me, I found my niche day trading grain futures contracts, and I love it. What I like about it is that it is short and sharp, and the risk is tightly controlled. By short and sharp I mean that I only have to trade for about thirty minutes each day, but I have to really concentrate during that period to make sure that I execute my strategy with no mistakes. As for risk, I am usually in the market for a matter of minutes, a few hours at the most, and never have positions open overnight or at weekends.

This suits me perfectly. I enjoy the quick feedback from my trades, and I sleep easily at night knowing I am not in the market exposed to freak events that can be very painful when you are in a leveraged position.

Authors criticizing day trading are usually trading Forex. The day traders enemy is trading costs, and despite the commission free trading generally offered by forex brokers, trading costs are high because of the spread. If I were to try day trading forex, I would use futures contracts at the CME (Chicago Mercantile Exchange) during high volume periods.

However, I prefer markets with enough volume to ensure a tight spread, but not such a huge volume that the market becomes hard to read. The grains (soybeans, wheat and corn) fill the bill exactly for me. Equity indices (Russell 2000, S&P 500, Nasdaq eminis and the Dow $5 contract) are also good at times, but I find them more difficult. I dislike the very high volume bond market. I am not saying you can not make money there, all I am saying is that I have not succeeded!

Share traders often find a similar effect whereby very high volume shares like Microsoft are harder to day trade than a middle of the pack S&P 500 company. Usually successful share traders watch a group of stocks which they like and feel confident with.

The point is you do have to make the effort to find the best markets for the kind of trading you like to do. I think it is putting the cart before the horse to decide on a particular market before you decide on your trading style. My advice is to find the style that suits you, then find the markets that respond best to that trading style. Of course, markets are not static, so you will always be monitoring them, and be prepared to change if another market comes to the fore.

I have discussed the keys to successful day-trading in other articles, but briefly they are as follows:

* Understand how support and resistance works in the market.

* Build a trading method utilizing support and resistance levels. (The tactics you can apply near these levels are almost limitless.)

* Back-test your method on independent data (not the same data you used to design it). Ensure it has a positive Expectancy and good frequency of trading opportunity.

* Plan your money management strategy so that you know how much to invest in each trade without exposing yourself to too much risk.

* Practice, practice, practice, so that you can execute your trading plan flawlessly every time the opportunity occurs. This is harder than it sounds when day trading. Things happen fast and there are a lot of things to think about.

The trader who does these things, and has the discipline to stick to the trading plan during winning and losing spells, will be successful. As many, many authors have written, trading is 90% psychology. The main enemies are your own lack of discipline and self-honesty. Of course, the majority of day trading is done from the trading rooms of large investment banks and brokerages, and the professional traders involved are using bank funds and are not subject to the same levels of stress. You have to learn to perform as well as they do despite the additional anxiety of having your own money at risk.

Online Day Share Trading Schemes And Investments

Is trading through internet safe? What if someone steal my investments or, does anyone else have access to my accounts? If these are the questions that stop you from online share trading then the solutions are here. Which decade you are living in? Internet trading today is one of the largest mediums of investments and nothing can compete with it. Its security and reliability can be proved by the increasing number of users every month. More than 5,000 people are registered every month for online investments. Apart from being totally secured, easy access and speedy moves makes it more popular among day traders and other stock investors.

However, there are some questions that very often arise in minds of people like:

1. Is stock trading through Internet difficult and cumbersome?

Well, the answer is no. Just few clicks and all the information is on the monitors. Online share trading, rather, is the simplest of techniques to trade in stocks. Few clicks can get whole stock exchange to the computer screens where the greens, blues and reds differentiate the stock and hence, trading gets easier.

2. Isn't online trading costlier?

It could have been because the features and comforts it offers could be expensive. However, with the increasing competition prices to be paid are meager. Also, the technologies are rapidly improving, hence, leads to further depreciating prices. One more benefit that comes attached to online trading is the reduced paperwork and confusing formalities.

3. Present offline broker is satisfactory. What is the use of shifting to online broking firms?

Online broking firms are comparatively less expensive and better service providers. Apart from the stock exchange access, the tips and advices are quick and instant. Unlike offline trading, Internet tips are updated frequently and hence, provide better grip on the situation. Also, online traders have access to other information sources including 24-hour stock sites that provide better stock-trading knowledge to the customers.

4. How frequently are the prices updated on the websites?

Though there is no fixed standard time for updating but most of the sites are frequently updated to maintain their competitive level. To be precise, most of the sites are updated hourly, however, during emergencies or drastic changes, the sites are even updated every minute. Also, anything like major take over or company declaration, are instantly and fully covered by news.

5. How can we make sure that the prices offered by the brokerage firms satisfactory?

The answer to this problem is easy. Like any other market, there are many firms providing the same services. Hence, comparing the prices and other share trader's advices can help you make better decision regarding the choice of broking firm. Also, different sale promotion schemes and discount brokerages can be availed at the time of registration.