Day Trading refers to the buying and selling of financial instruments such as shares,currency (FOREX), futures, options,commodities or indices (FTSE, Nasdaq,NYSE and Tokyo etc..) in order to make a profit through speculation in the change of their values.
The term day trading encompasses many different types of trades such as equities, FOREX – foreign exchange market, CFD’s – Contract for differences etc.. A trade and can be short term – a matter of just a few seconds or minutes to long term where trade positions are held throughout the day or longer, but the general concept of buying and selling is still the same.
- Choose a share, commodity or index that you are familiar with – most people find that the FTSE 100 index is a good one to start with.
- Take time to study and research your chosen area of day trading and keep up to date with all the latest information and changes.
- It is important to remember that the value of your original capital investment can go down as well as up and you could get back less than you invest.
- Learn how to place ‘stop losses’ this is a trigger point to buy/sell your current position. The purpose of this is that you can decide in advance how much you are willing to risk and ensure that you are not exposed to any unnecessary risk.