Stock market day trading

Is Stock Market Day Trading For You?

Most investment firms talk of the stock market as if it were a bank in which one can put money and watch it grow over time. The truth is that there is as much chance of losing money in the stocks as there is of making money. With this in mind, many people do not hold long term positions in the stock market. Instead, they make several trades each day and have each position closed by the end of the market day. This practice is known as stock market day trading.

What is Stock Market Day Trading?

Unlike the traditional investment option of buying stock and holding it as it gains in value and pays dividends, day trading means to take advantage of the swings in price of different stocks each day. In many cases, the fluctuations in price occur so quickly that one may open a position and close it within the same second with a hefty profit or hefty loss to show for his effort.

What Are the Risks Associated with Stock Market Day Trading?

Day trading takes advantage of the volatility and liquidity of stock prices based on trends, technical analyses, and financial news releases. One can usually judge how the market will react to certain types of news and place orders that take advantage of these movements in the moments following a release of information.

Sometimes, however, the news does not affect the market in the way one would expect. Typically this is because the information in a news release has leaked to the market somehow and prices are already reflecting that information. In these cases, the market does not move as expected. One could easily lose money on trades based on the release of information.

Most day traders use borrowed money (margin) to amplify the profits from their trades. An example of this would be a trader with 25000 rupees in an account that allows 25 percent margin. This means that the trader can enter a position with 100,000 rupees at his/her disposal. Another term for this practice is leverage because the original investment of 25000 leverages the results of a 100,000 rupee trade.

Traders who leverage their trades in this manner are subject to a margin call at any time. This means that the lender whose money is being used can demand repayment at any time. If one has one or two trades that are going against his/her position at that time, a margin call can wipe out his/her entire account.

In addition, losses can be amplified in the same way that profits are. If one uses leverage and margin to make trades, it is critical to have stop loss orders in place for any open position. The original investment can disappear four times faster in an account such as the one mentioned above or the profits can add up four times faster than they would without the margin.

What Are Some Stock Market Day Trading Strategies?

Playing the news is probably the most widely used day trading strategy. In this strategy, one follows the release of important news and financial information, entering and exiting trades based on the market's reaction to the news. Some traders go so far as to prepare two separate sets of orders planned around the release of information so that they can take advantage of price movements in either direction.

Scalping is the second most popular of all available stock market day trading strategies. This strategy takes advantage of the difference between the bid price for a stock and ask price, known as the spread. This difference is normally quite small, but its effects add up quickly when one is talking about large trades. Positions are normally opened and closed very quickly, usually within less than one minute with profits taken or losses minimized by the speed with which one closes out of the position.

There are several other strategies that people use for stock market day trading. One, known as rebate trading, uses commission paid by ECNs to traders that place limit orders that create a phenomenon known as "market making". These traders normally deal in lower priced stocks that can be bought or sold in huge blocks in order to create more liquidity within the market but this method is not applicable for Colombo Stock Market.

Is It Possible to Earn a Living with Stock Market Day Trading?

Absolutely. Day trading creates an environment that allows for the accumulation of huge amounts of profit in a very short time. Active traders who enter and exit several positions in any given day tend to maximize their profits while minimizing their exposure, thus limiting their risk. One can lose money on any given trade, but if the technical analysis is accurate and one has accurate news and financial information with which to work, the odds of entering a losing trade are drastically reduced.

The key to successful stock market day trading is to create a plan for when to enter and exit trades, follow that plan to the letter, and never let emotions guide a trade. One may see a trade continue to climb in value well past the limits one has set for profit taking and choose to keep the position open based on the emotional high of seeing more success than anticipated. Then, without any warning, the market price can reverse and see that winning trade become a losing position in a heartbeat.

Overall, stock market day trading can prove to be a very lucrative source of income. There are some key elements to take into consideration in order to limit exposure to risk and minimize losses. Proper analysis of technical data, price trends, and the importance of news items and how they will affect the market are critical to one's success as a day trader. This may take time to develop all the necessary skills to plan and execute trades in such a manner as to maximize profits. However, the rewards for success prove to be well worth the risk one takes by investing in the stock market.

Please stay in touch for Forex Day Trading article.

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Dedicated FOREX website – Best Online Forex Broker

An opportunity to learn Online FOREX Trading!

Due to increased inquiries on the same question “How to Trade FOREX?” we have decided to launch a fresh website that dedicated to FOREX Trading with a separate forum.

To be honest when I use chat feature at my Forex broker (eToro), I found only very few Sri Lankan Forex Traders but huge number of traders from India. The common reason for this is relatively low usage of Broadband Internet in Sri Lanka.

Visit Best Online Forex Broker site today & join the FOREX Forum. You can learn the basics of Forex for free from this site.

Trading Forex is not a rocket science, if you learn the basic things then practice with a free demo account you will get the confidence that you need to trade with your real money.

You don’t have to think twice just visit   Best Online Forex Broker & download the trading software or try the web based version for free as much as you want. It will cost you nothing.      

Is EToro Forex A Scam?

One financial market that was kept a secret by banks and big business until relatively recently is the forex market. Changes in the law forced this market to open up to private investors, as well as large corporations and banks. Because this market is relatively new as far as private investors are concerned, it is not easily understood. One online platform that has attempted to simplify it so that anyone can invest and profit in forex is eToro. Still many people who have used this platform have lost money and have raised the question, "Is eToro forex a scam?"

Contrary to what some disgruntled investors might say, eToro is completely legitimate and offers an online trading platform designed to make investing in the forex market easier to understand. In order to do this, they offer graphic interfaces that are similar to games or CGI animations that depict what the market is doing in terms of the currencies involved in a given trade. Because these animations do not resemble the technical graphs and trends that many investors expect, they believe this platform to be a scam.

The plain truth is that many investors around the world are using eToro on a daily basis and making money. Even people in Asian countries such as India, Indonesia, Bangladesh, and Pakistan are generating profitable trades using the eToro platform.

One reviewer claimed that eToro is a scam because he used it to make trades which lost money and made the exact same trades on another platform and made money. This begs the question, was the trades carried out simultaneously or was there a delay on one platform or the other? The forex market is highly fluid and changes can occur so rapidly that a difference in timing of just a few seconds can mean the difference between a profit and a loss.

One thing that eToro does do is offer a practice account that one can use to familiarize himself/herself with trading on the forex market. Some complain that all their trades in the practice account made money while all trades dealing in real money lost money. Again, this comes down to a matter of timing.

It is also possible that there is a disconnect between the practice account and the actual market. After all, the purpose of the practice account is to teach one how to trade, not necessarily to parallel the actual market.

While most platforms require minimum balances in trades of 25 USD or more, eToro introduced accounts that allow one to enter a trade for as little as 2.50 USD in January 2010. This move was made in an effort to help its customers limit their exposure, thus limiting losses on bad trades.

What eToro forex is is an online trading platform in the forex market that is designed to make trading in foreign currencies easy, even for those who have no investing experience whatsoever. The fact is that the forex market represents an opportunity to make huge profits. However, for every trader that makes a profit, someone takes a loss. This is why investors are warned repeatedly not to risk money they cannot afford to lose.

Other related articles on FOREX trading.

Stocks Vs FOREX

eToro FOREX Broker Review.

If you already have trading experience with eToro FOREX Broker (Good or bad) please post it on our FOREX Forum .

Colombo Share Market Report - Strong recovery.

After two days of decline CSE recorded strong gains today. ASI gained 1.41% or 49.11 points to close at 2532.41 & MPI closed at 4071.08, up 60.57 points. Turnover was amounted to 1.2 billion rupees. John Keells Holdings Plc alone contributed Rs 185 million for the total turnover. There were wide spread buying interest in almost all the sectors.

Highly capitalized index heavy both Dialog Telekom & Sri Lanka Telecom made gains today. Sri Lanka Telecom Plc closed at Rs 43.00, up 1.25 while Dialog closed 25 cents higher at Rs 7.00. The Bukit Darah Plc was up by Rs 120.00 to close at Rs 2970.00. Haycarb Plc closed at Rs 196.00, up Rs 16.25. Mercantile Shipping Plc the Sri Lanka’s only listed shipping company was up by Rs 19.00 to close at Rs 120.00.

John Keells Holdings closed 50 cents higher at Rs 175.00. Well diversified alcohol producer Distilleries Company of Sri Lanka Plc gained 25 cents to end the day at Rs 116.00.

MTD Walkers Plc lost 52.50 to close at Rs 373.25 while Renuka City Hotel Plc closed at Rs 205.00, down 17.25. Total of 125 stocks made gains while 26 of them declined. Foreigners bought 102.3 million worth of stocks & sold stocks valued to Rs 476.3.

It is very hard to predict the results of upcoming presidential election. Our opinion is investors should take part of profit from the gains they made in past few days.     

If you wish to discuss & express your opinion on Sri Lanka’s economy & Colombo Stock Market, please visit the Sri Lanka Stock & FOREX forum.

Do you like to share your knowledge on Colombo Stock Market?

We have just launched a forum for you to share your knowledge & information with other investors. We strongly believe that when it’s comes to Investment in stocks or FOREX we can greatly benefit if we share our knowledge & information with others.

CSE today forum is still very small but hope it will grow up with time. All will depend on how you will participate. We will award few Moderator Ranks for members who will actively answer other member’s questions in useful way. 

Please note that we don’t have any relationship with Colombo Stock Exchange or its official website cse.lk.

You can find the forum link by visiting this post.
http://www.stock-market-today.net/2010/07/sri-lanka-stock-market-forum.html

Stock Trading Versus Forex Trading-Which Is Better?

In the world of financial dealings, there are different types of markets investors can place their money in. Investors will can gamble on commodities and futures, invest their money in bonds that have a guaranteed return, but take years to be able to collect, invest in stocks, or trade currencies on the Forex market. While only bonds carry a guaranteed return, commodities and futures are so risky that they could not be considered stable income providing investments. This leaves stock trading and Forex trading. Of the two, stock trading versus Forex trading-which is better?

Stock trading has the advantage of transferring ownership of a small percentage of large corporations. The price of stocks varies from day to day, hour to hour, sometimes minute to minute. However, substantial gains on the stock market normally take months to years to develop. This is because businesses often take months to years to grow in value in to afford to pay dividends to stockholders and to make the price of their stocks go higher because the company is more valuable.

Stock trading for the long-term has been shown to be a relatively stable investment, especially if a person diversifies and places money in different stocks. This is the basis of many mutual funds and 401(k)/403(b) type retirement programs.

The basic idea is to take a small amount of money placed it in the market in a stock that the broker is confident will gain in value, then sit back and wait as the investment grows. Periodic additions from investors and in the case of retirement plans and their employers also add to the value.

For those who seek a little excitement with potential for a lot of gain, the Forex market may be the way to go. Trading on the Forex market involves extremely high volatility and fluidity. Basically, this means that trading on the Forex market can either gain large amounts or lose large amounts in value in a very short time. Often, this time to be measured in minutes or hours.

There are tools in place, especially on Internet-based platforms, that allow investors to make technical analyses of market trends over any period of time they choose. By making correct use of these analyses, investors are able to chart trends and make educated estimates on when is the best time to enter a trade or to exit one. Under the right conditions, a smart Forex investor can make as much money over the course of a few hours as the average stock investor makes in a year.

Therefore, when trying to decide which is the best type of investment for you, stock market versus Forex trading, one must analyze one's goals. If the goal is to produce a steady long-term return on investment, the stock market provides a more stable environment in most circumstances. However, certain situations can arise that caused the value of the stock market to plummet very quickly and a person can lose a lot of money.

If the goal is to make money quickly, efficiently, and the person is not afraid of a little bit of risk, the Forex market may be where this person should invest. One must pay more attention to how one's investment is doing on a minute by minute basis in Forex, but, if handled rightly, Forex investments tend to have a much larger return on investment in a much shorter period of time.

If you are from Sri Lanka & thinks you can’t trade FOREX, you are wrong. You can start trading with as little as US$ 100. All you need is Visa or Master credit card to deposit & withdraw your funds. You can get more information from here or mail me at info@stock-market-today.net.

How to Find a Best Forex Broker?

Trades in the forex marketplace rely on international money amongst many countries to create a balanced marketplace where millions of deals are completed on a day-to-day basis. This market is similar to the stock market, because individuals buy and sell stocks in the same fashion, but the exchange and the overall outcomes are much broader. Those dealing in the forex exchange include the UBS, the Deutsche bank, HSBC, and many others like Citigroup and Merrill Lynch and even more American financial businesses.

To get involved in the forex trading markets, contacting any of these large broker assistance firms would be the most beneficial step for you. Sure, anyone can get involved in the forex market, but it does take time to learn about what is hot, what is not, and how you should invest your money.

Far reaching international banks are the primary investors in the forex exchange, as they have millions of dollars to invest daily, to earn interest and this is just one method of the savings accounts of millions of people making money hand over foot. Think about the bank that you deal with all the time. Do you know if you can go there, and attain money from a different nationality if you are heading out on vacation? If not, that bank is most likely not into the foreign market exchange. If you need to know if your bank is involved in forex trading, you can ask any manager or you can look at the financial information sheets that is required they report to the general public.

If all of this type of trading is a new thing to you, you need to understand that there isn't a single institution controlling the forex exchange. Various currencies are traded, and can originate from anywhere in the world. The common monies traded in the foreign markets are the Eurozone euro, the yen, the Swiss franc and also the Australian dollar. These currencies are just a small part that are bought and sold on the forex exchange, with several other countries included in this bunch. The primary trading hubs for the forex are located in Tokyo, New York and in London but with other smaller trading centers located thought out the world as well.

EToro FOREX broker offer you easy to understand software to trade FOREX & they also offer you more deposit & withdrawal options including Paypal & NETELLER. NETELLER gives you free Debit card that accept anywhere in the world.

Forex Exchange Market Vs Stock Market

The FX market is also known as the international foreign exchange market. Dealing can take place between any two countries with unique monetary systems is the foundation for the fx market and the background of the trading in this marketplace. The FX market is over 30 years old, established in the 1970's where you are not speculating or dealing in business concerns instead it is based on the buying and selling of currencies.

The main difference between the fx market and the stock market that difference is the amount of trading that goes on here an amazing two trillion dollars or more can be traded each day A much higher amount than the money that is traded on the daily stock market of any country. The forex market is one that involves multiple financial institutions within a country and another countries counterparts to those institutions.

The items that are bought and sold on the fx market are easily liquidated this means that they can be turned into cash quickly if it is not already cash From one countries currency to another the availability of funds is readily available to any investor worldwide

The biggest difference the foreign exchange market and the stock market the fx market is global. The stock market is something that takes place only within a country and involves the products and businesses of that country the fx market goes further to involves any country.

There are set business hours for the stock market which typically follow the traditional business day this means that it is closed on holidays and weekends The forex market however, is one that is open generally twenty four hours a day due to the variety of countries that take part in trading selling and buying in a variety of time zones. Markets open in one country another countries market is closing so this is a nonstop method of how the fx market occurs.

A stock market in a country is based on that country's currency say for example the Japanese yen, and the Japanese stock market, or the United States stock market and the dollar. However, in the forex market, because you are involved with different countries and multiple currencies. You will find references to a variety of currencies, and this is a big difference between the stock market and the fx market.

Day Trading Tips For Asian Stock Markets

Whether you're looking into day trading for any type of market or looking into a particular market, it's important that you understand all the markets and how they can affect each other. Day trading tips for Asian stock markets especially the Colombo Stock Market will help you understand the other markets as well.

Stocks are traded the world over and many countries have their own stock market such as the Colombo stock market. But when you're day trading you must be aware of what the other stock markets are doing. This Stock Exchange will allow you to day trade with buying brokerage and is fully automated similar to the trading platforms used by the Stock / Forex markets

In fact, some brokers are actually in touch with all the different markets and when you want to buy or sell, they will choose the market with the best rate at the time of the sale. Being able to invest in a foreign market such as the Colombo market, which has no restrictions on foreigners investing, can allow you to take advantage of different stock prices for day trading.

This is one of the tips for selling on the Asian market, make sure your broker is one who will choose the best price in any of the markets at the time of sale.

Also, you'll want to watch the rise and fall of the currency of the market you're trading in, it's vital that you know what their currency is doing. You can keep tabs on individual currency markets by watching a foreign currency market platform also known as Forex.

If you are aware of what the different currencies are doing, you'll do better at knowing when to buy and sell in any one market. So be sure to get a Forex platform downloaded before you are trading in the Asian market or anywhere else.

Stocks are just like anything else, they may fall a bit before they begin to rise and this is where a day trader comes in. Day traders are trying to take advantage of these small rises and falls of the market in order to make a profit.

As a day trader you're going to need to take advantage of all the news, worldwide and local in order to figure out what is going to be happening with a stock at any one time.

Politics, currency value, as well as corporation policy and employees all affect the worth of an individual stock.

As a day trader, you can use these tips to study before you actually begin trading. It's important that you do not begin day trading with anything but your disposable income.

Those who dive into day trading with their investment portfolio often loose quite a bit of it before they learn the ins and out of the markets in question.

So before you begin day trading make sure you understand all of the markets and how they affect each other, understand how currency value can affect stock prices, and also understand how the news can affect day trading prices on a minute by minute basis. Also, of course, do not start out day trading with your rent money or retirement portfolio.

These tips will apply to all markets the world over and not just to the Asian markets or American stock market. Make sure you understand how all of this can affect the day trading opportunities you see.
Stock Market Today

How to trade FOREX

FOREX is the largest financial market in the world. It is larger than all the Stock Markets of the world.

What is traded in FOREX market?

The simple & most suitable answer is “Money”. You can trade US$, Japanese YEN, EUROs & other major currencies.

Trading FOREX is high risk investment especially if you don’t know what you are doing. For this reason most of FOREX brokers offer free practice (DEMO) accounts with virtual money for beginners to learn before they play with real money.

Choose a good FOREX Broker.

Choosing a broker with good track records is very important when it comes to online FOREX trading. I selected eToro. With given virtual cash I already made US$ 700 in 30 minutes. Of course I took high risk leverage (400:1) because it is not real money. eToro is probably most user friendly Forex platform you will find over internet. They accept different payment options including Paypal to fund your real account once you finish your learning process.



If you need more information about FOREX trading I highly suggest you to visit Babypips Forex Training School. It is free.