Day Trading

The stock market holds countless opportunities to profit from every day. When you learn the art investing in the stock market you have access to a personal ATM machine from which you can extract money on a continual basis. It is simply a matter of learning how to profit off of the fluctuation in the price of the underlying security. This can be done over the course of years for long term investing, down to a matter of seconds for scalping.

There are two main approaches to selecting a stock move that you believe will be profitable. They are Fundamental Analysis and Technical Analysis.

Fundamental Analysis deals mostly in the well being of the company itself. The perception that a company is performing well or poorly are examples of fundamental analysis. News reports, earnings, and company reports such as Income Statements and Balance Sheets are all forms of Fundamental Analysis.

Technical Analysis is the term used to describe the analyzing of a stock based upon a stock chart. You would be surprised how many stock investors don’t know how to read a chart which is one of the reasons why you may have heard of people losing money in the market. That or they gave their money to a money manager that collects a commission just for placing your money into stocks and forgetting about it. Either of those occurrences can be prevented simply by learning for oneself how to read a chart.

When you learn how to read a stock chart you have the ability to manage your own money in the market and you can profit off of fluctuations that go undetected by traditional buy and hold investors.

You can make money on a stock whether it is going up or down in price by either going long or short on a position. Long means you want the stock to go up and Short means you want the stock to go down.

By placing yourself at the right place at the right time in the market you can benefit greatly.

The stock market has within it many other markets which comprise it; all of which are brimming with opportunity.

Some of the major categories to be found within stock market investing include the purchase of stock, options, futures, and forex.

With Stocks you generally need a good amount of capital to invest as each share corresponds in price to where the stock is at in value on the chart. So by purchasing one share at that price your investment moves in tandem dollar for dollar with the stock. To be successful with this form of investing in the stock market you are generally going to want to buy more than one share which can become expensive. You can look for cheaper stocks to work with this way but cheaper stocks tend to move a little bit slower or by less dollar points per day.

Options on the other hand are a great way to get into the stock market even without a large amount of capital to work with. Options contracts can be bought at a fraction of the price of a stock and move with high degrees of leverage. This means that you can make more with less. Options have a lot of extrinsic values determining their price such as Time and Volatility. By understanding the different factors that make up the value of an Option contract you can be very successful with this type of investing.

Futures have their own advantages and disadvantages as well. On the plus side futures can be traded many more hours of the day than stocks and you do not have to refer to an option chain as you do with options. You can also day trade with less than the day trade minimum with futures. On the downside one futures contract on a commodity such as oil can cost a few thousand dollars to control. For this reason it may help to start off trading just one contract at a time.

Forex is the foreign exchange market which is the trading of the various currencies between nations. Forex is open 24 hours a day and nearly 7 days a week. Forex trading comprises the fluctuation in value of a currency pair which is the relation of value in one nations’ currency to the currency of another nation. Forex trading is the realm of the bots where you can find a good automated bot system that can handle most of the trading decisions for you.

Whichever area of the stock market you decide to invest you will be sure to find a wealth of opportunity every day. It takes a lot of research and study and I would recommend finding a good discount broker with a Virtual Trading tool to start with so that you can practice trade before you go live. But when you get into this market you will see the kind of profits that are available to you every day.

Author: Bill Perrone
Article Source: EzineArticles.com
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