The Myth of Daytrading.

Day traders need to know when news is going to be released, because many markets react to news releases in erratic ways (such as very quick, large moves, in both directions).

Day traders refers to the practice of buying and selling of financial instruments within the same trading day such that all positions will usually (not necessarily always) be closed before the market close of the trading day.

Financial instruments such as stocks,stock options,currencies and a host of futures contracts such as equity index futures,interest rate futures,and commodity futures are the most common products.

Many day traders are bank or investment firm employee working as specialist in equity investment and fund management.

However,day trading has become increasingly popular among casual traders due to advance in technology,changes in legislation,and the popularity of the internet.

Day traders usually trade on borrowed money, hoping that they will reap higher profits through leverage, but running the risk of higher losses too.

While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to sustain the devastating losses that day trading can bring.

Here are some of the facts that every investor should know about day trading:

Be prepared to suffer early losses.

Day traders should only risk money they can afford to lose. They should never use money they will need for daily living expenses, retirement, take out a second mortgage, or use their student loan money for day trading.

Day traders do not "invest"

Day traders sit in front of computer screens and look for a stock that is either moving up or down in value. They want to ride the momentum of the stock and get out of the stock before it changes course. They do not know for certain how the stock will move, they are hoping that it will move in one direction, either up or down in value. True day traders do not own any stocks overnight because of the extreme risk that prices will change radically from one day to the next, leading to large losses.

Day trading is an extremely stressful and expensive full-time job.

Day traders must watch the market continuously during the day at their computer terminals. It's extremely difficult and demands great concentration to watch dozens of ticker quotes and price fluctuations to spot market trends. Day traders also have high expenses, paying their firms large amounts in commissions, for training, and for computers. Any day trader should know up front how much they need to make to cover expenses and break even.

Trading on margins are borrowed money.

Borrowing money to trade in stocks is always a risky business. Day trading strategies demand using the leverage of borrowed money to make profits. This is why many day traders lose all their money and may end up in debt as well. Day traders should understand how margin works, how much time they'll have to meet a margin call, and the potential for getting in over their heads.

Don't believe claims of easy profits

Don't believe advertising claims that promise quick and sure profits from day trading. Before you start trading with a firm, make sure you know how many clients have lost money and how many have made profits. If the firm does not know, or will not tell you, think twice about the risks you take in the face of ignorance.

Watch out for "hot tips" and "expert advice" from newsletters and websites catering to day traders

Some websites have sought to profit from day traders by offering them hot tips and stock picks for a fee. Once again, don't believe any claims that trumpet the easy profits of day trading. Check out these sources thoroughly and ask them if they have been paid to make their recommendations.

Remember that "educational" seminars, classes, and books about day trading may not be objective.

Find out whether a seminar speaker, an instructor teaching a class, or an author of a publication about day trading stands to profit if you start day trading.

Above all,day trader must approach the markets with a totally mecenary attitude,"Rambo Style",seeking to make each day a winner.
Trading tools differ in their applications and resolutions.
Another caveat:-remember that complex interactions between traders personality,time frame orientation,personal factors affecting the traders,timing indicators and many other influences may yield markedly different results in each case.Traders are not like artist.

Another important note is NOT to be overgeared in order to sustain your long term presence in the market.Trade in SMALL LOTS and not to be overly confidence which WILL normally result in big-blows like that of Mike Tyson!My experience tells.The market is a RIGGED game,as the joker card is always in the hands of the banker.

Quotable Quotes:-

No matter how good your timing is by virtue of correctly interpreting all the major indicators,you still have to choose the right stock & this is where all the strategies are employed,the fusion of timing with choice buying or selling the right stock,at the right time.....
The timing might be right but the wrong stock was purchased.The right stock might be bought at the right time but sold at the wrong time,cancelling out all the advantages of the early success.
(J.E.Granville)