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Follow on Google News | Economic Situation / Day Trading: Related?Is the state of the Economy and Day Trading directly related? Yes and no, there are many factors to Day trading and the state of the Economy might not be the all deciding factor.
By: Trademark Academy For some obscure reason, there are those of you out there who mistakenly assume that successful day trading can only take place during times when the general economic situation is good, during a period of economic prosperity. You couldn’t be more wrong. But, on second thought, the reason for your thinking that way may not be so obscure after all. We can, perhaps, understand your line of reasoning, understand what leads you to erroneously believe that, in order to do well in day trading, the economy has to be stable and on the up side. Your brain tells you: President Obama is lecturing nonstop about the sagging economy and various related topics + people around you are doing very poorly in business these days + stockholders are anxiously trying to keep afloat amidst tremendous losses = delete any and all notions or intentions of day trading, for it is impossible to “make it” in the market when the economy finds itself in such a weakened state. Right? Wrong! Had the previous statement been an answer to a question on an exam, a teacher grading the test paper would swiftly circle it and clearly mark it in rich red lettering “incorrect equation”. Due to a lack of proper knowledge on the subject, your brain is feeding you misinformation! Let’s delve a bit into some of the details and dynamics involved in day trading, so that we can better comprehend how, and why, it is that day trading holds potential for success regardless of the economical state of affairs. Day trading deals with the here and now, with the happenings in the market on a minute-to-minute, and even second-to-second, basis. While the market busily fluctuates throughout the day, going through its expected ups and downs, day traders attentively monitor the proceedings as they wait to take their plunge. They observe the prices of shares escalating ever higher, and then, moments later, dropping drastically. They keep track of stocks that were worth pennies minutes ago, suddenly soaring to significant values. And somewhere in between these goings-on, the ever-ready day trader will grab an opportune moment to take a position and turn himself a profit. He might decide to purchase a share at a low cost with the confidence, acquired through careful analysis, that he’ll be able to sell it shortly at a rate that will yield returns. Or, he may choose to short-stock: We have a setting here of a market where shares are being bought and sold all day, where prices are constantly rising and falling. This is a daily situation, an anticipated situation. The market opens at nine thirty, day traders diligently begin buying and selling, price tags keep being altered to the up or down side. And this setting doesn’t change. The scenario repeats itself day in, day out. So, whether the economy is spiraling downwards, or whether there is big talk of the market tanking, it doesn’t affect what occurs in the day trading arena. Because with day trading, it’s current movement that counts. It’s what’s happening this hour, this minute, this second that makes a difference. Unlike stockholders, who acquire stocks and hold on to them for long periods of time-months, and even years-and therefore can unfortunately find themselves stuck with shares that are practically worthless during a phase of an economic decline, day traders “do their thing” and are out of any position at the end of the day, at market close. Stockholders are long term traders; day traders complete their transactions in anywhere from a few seconds to a few hours. And that is the precise logical reason why the general economic, or market, state doesn’t influence the success rate of day trading. Conditions may be good or bad; it doesn’t carry relevance as far as day trading is concerned. For in a setting as described above, there is always opportunity to dive in at the perfect moment and “make that pitch”. Of course, we all hope for an up market, for a healthy economy. The point is that, up or down, healthy or unhealthy, scientifically it doesn’t affect day trading. In summation, we now have a clear grasp of the distinction between day trading and long term trading (or day traders and stockholders) This article was shared with you by “Trademark Academy”, an institution that offers detailed courses on day trading, including exclusive techniques to increase chances for success. To learn more about Trademark Academy, or to sign up for their remarkable courses, either log on to their website @ www.trademarkacademy.com, or contact them direct at 718.989.8505. # # # Come visit out site at www.Trademark.com to learn more about day trading and how to become a better trader. End
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