Day trading is taking short-term positions in the market. Short-term really means any position that is held for less than one year.
What is Forex?
The Forex market is where currencies are traded. Examples of currencies include United States Dollar (USD), Japanese Yen (JPY), etc. Currencies are traded in pairs, for example, USD/JPY. Currency pairs change in value depending on the value of the currencies compared to each other.
What is Futures?
The Futures market is where commodities are traded. Most natural resources are traded here such as Crude Oil, Sugar, Corn, Wheat, Silver, and Gold, just to name a few.
What is the Stock Market?
The Stock market is where shares of publicly traded companies are bought and sold. Examples of companies that can be traded in the stock market include Apple, Google, Netflix, Exxon, etc.
Can I make money day trading if the market is going up or down?
Yes, if the price is going up you can go long and make money if you’re right. If you believe the price is going down, you can also make money by going short.
How soon can I get out of a trade?
In most cases you can get out of a trade immediately. If the market is liquid (meaning there is high volume) it is easier to get out of a trade than if the market is not liquid (meaning low volume).
Can I day trade with my own money?
Absolutely! But we highly recommended that you start trading on a demo account first to better understand the market then slowly explore with small account sizes.
How much money do I need to start day trading?
You can start day trading with a micro account in Forex with less than $100. The initial capital required to open a Futures account can be between $500 to $2,000. To day trade the Stock Market you need a minimum of $25,000 in capital if you plan on getting out of your trade the same day more than 3 times a week.
What are the fees associated with day trading?
Most brokers will charge a flat monthly platform fee. In some cases there is an additional monthly fee to access market data. All brokers charge a round trip fee and commissions for entering and exiting trades.
What kind of computer do I need to start day trading?
You can use either a laptop or a desktop computer to trade. It is recommended that at minimum your computer have 2 GB of memory, 20 GB of free space on the hard drive, and a 2 GHz processor. It is critical to have enough monitor space so we recommend using 2 monitors or more for your setup. Traders will often use large flat screen TVs as an additional monitor.
What is the one thing I must do to become consistently profitable at day trading?
The simple answer is you need time in the chair. By “time in the chair” we mean day trading in live markets with real money. No matter how big your trading account is or the amount of money you’ve spent on learning a strategy nothing matters more than testing your skill in live market conditions. The most successful traders have spent countless hours refining their strategy and mastering the psychology of trading.