Understanding
Day Trading
What
is Day Trading?
Day Trading is the most respectable
and exhilarating field of global trading, but also the one that requires the
most acuity.
It consists of adopting multiple buying
or selling positions throughout the day, starting each morning from scratch and
closing the positions each evening, regardless of the circumstances. The sensations,
as well as the adrenaline, are through the roof and take the day trader on a
roller coaster of emotions. It requires finding the right tool, at the right
time, for the right situation, and... doing it over and over! A newbie might feel
like they’re looking for a needle in a haystack, while those who really thrive
get to join a select handful of traders known as the elite.
It’s also important to remember that Trading
has nothing to do with gambling and even less to do with chance. The expression
"playing the stock market" is totally misleading and always wrongly
used by those who think that the stock market resembles a game of chance—or worse,
a casino! In reality, if a market drops, it is only because, at that particular
moment, there are more sellers than buyers. It’s that simple. The trick is to
understand why and act accordingly.
Why
Day Trade?
Day Trading is for thrill-seekers, which
is almost everyone, but especially those who like speed, excitement and immediate
results. Day Trading is practiced only by a handful of traders worldwide and lets
traders get off the beaten path by setting themselves apart from the sea of financial
advisors and "gurus" whose rudimentary advice is only heeded by those
who listen to them.
Indeed, even if a general pattern could
be identified over the span of a day, statistically there’s only a 5% chance
that it will be uniform. The other 95% of the time, you will have to adopt
several contradictory positions throughout the day.
Advantages
and requirements of Day Trading
The first advantage unique to day
trading is that by definition there is no "overnight" risk that other
global traders engaged in swing trading have to endure. Without even going as
far as systemic risk, day trading avoids all the "gap" openings (when
the market opens at a significant point difference compared to the previous
close) in the opposite direction that occur multiple times a year.
The second immediate advantage of day
trading is that it allows you to measure and analyze your results every night, letting
you assess your own mistakes and correct them.
Last but not least, once you know how
to do it, Day Trading has the advantage of pulling returns and performances that
far surpass the performances of all listed and official funds and portfolios on
the global market.
Day Trading is a demanding activity
that requires a great deal of physical and mental stamina, concentration, and
training, making it comparable to a high-level sport; even if you had a
driver's license, you probably wouldn’t get very far when you sit in the back
of a Formula 1 car for the first time! So the more you practice, the better you
will perform!
We have intentionally decided not to
use the word "risk" in the title of this section since all forms of
trading involve risk, which refers to the partial or total loss of invested
capital.
Can
you make a living from Day Trading?
Yes, as long as you follow all the
rules accepted by experienced traders and above all, train and practice
relentlessly for many sessions in order to develop the reflexes and know-how that
will prepare you to navigate any situation. Even if you don’t make Day Trading
your bread and butter, we assure you that, after 35 years of experience and
almost 10 years of publishing our daily performances on the Index and Forex
markets, when strict rules are followed according to an impulse signal, it’s
possible to regularly accumulate gains in any circumstance and thus live up to
the famous saying: "tall oaks from little acorns grow".
How
do you get started in Day Trading?
The
requirements
A
good worker needs good tools!
We believe that four resources are
necessary:
- Good equipment: at least a recent PC
and two fairly large screens.
- Reliable internet: a good quality
ADSL connection, ideally fiber.
- A broker recognized by the stock
exchange authorities of major European countries: France, Germany, the UK,
Luxembourg, Switzerland, Italy, Belgium, and/or the Netherlands.
- A reasonable starting capital: too many
novice traders fail because they take more risk than they should relative to
their capital. If you are aiming for an average daily return of 0.5 to 1%, a
minimum capital of €/$8000 is highly recommended.
Don't
hesitate to use the right help
Why should you do this? Simply because
the end justifies the means. Never forget that the ultimate goal is to make consistent
gains. If you find a professional who regularly,
or even systematically, detects the correct starting impulses of a move (which
are the most difficult to find...), go ahead and use them.
According to vega-traders, successfully
engaging in Day Trading on your own requires, at the very least, thousands of
hours of market observation—not only to detect and recognize all the market
configurations at a given moment, but especially to know how to make the right
decision in a few seconds. vega-traders has developed the "Impulse Indicator"
to make that easier.
Happy trading!
