Day trading is the trading of securities within a single trading day thereby making a profit from it. It is the buying and selling of the financial securities or investments. A lot of people take out payday loans to get started trading stocks as it can provide you with instant cash. It can be shares, stocks, or currencies, and the trading transactions have to be done the same day before the market closes. This kind of trading is called day trading. Day traders keep the stock market running and provide the liquidity of the market. The safest way to do day trading is by not holding on to your stocks overnight.

Different Strategies for Day Trading

• Scalping – This is one of the most popular strategies where you buy and sell shares immediately within minutes as soon as it becomes profitable. This is a short-term trading style.
• Fading – This is a method by shorting stocks when their value starts increasing
• Momentum – This is a strategy based on news releases.
• Daily Pivots – This is a strategy in which the shares are bought when they are at the ‘Low of the Day’ and then selling them when they reach the ‘High of the Day’ thereby making a substantial profit.
• Swing and Position Trading – These are longer term strategies where the shares are held throughout the day and then sold.

How to become a successful day trader?

• Get educated on all the stock market strategies, their lingo, how to interpret data etc. also be aware of the economic situation and the impact of it on the stock market.
• Book your profits and losses. If you have made wrong decisions, book your losses instead of waiting and hoping for the market to change. Focus more on limiting your losses than maximizing your profits.
• Avoid overtrading.
• Have an emotional balance and discipline. Losses should not intimidate you. Similarly, profits should not make you overconfident and greedy.

How to do day trading?

Day trading can be done with the help of Direct Access Brokers. As a result, day traders can have access of all the exchanges and their markets making their trade execution faster and economical. It can also be done online by creating a trading account. Though it is a difficult skill to master, day trading once mastered can be financially very rewarding.

Forex is nothing but the Foreign Exchange Market. It is also referred to as FX and is the largest financial market in the world. It is an over-the-counter ‘Interbank’ market. It is an electronically run 24-hour market within a network of banks.

What do you trade on Forex?

On the Foreign Exchange Market, you trade with money or currency. In Forex trading you simultaneously buy one currency and sell another currency. The currencies are traded only in pairs and are traded through a dealer or a broker. The exchange rate of a county’s currency versus that of another country’s currency is a reflection of their economic condition over the other.

How you can make money by Forex

The objective is to exchange one currency for another, hoping that the price will change and the currency you bought will have an increase in value than the one you sold. You buy a currency as per the exchange rate of the other currency. The exchange rate is nothing but the ratio of one currency valued against another currency.

Currencies are always traded in pairs. In a Forex quote, the first currency is called the base currency and the second currency is called the quote currency. When you buy a pair, you expect the value of the base currency to increase in respect to the quote currency. Similarly, when you sell a pair, you expect the value of it to decrease with respect to the quote currency.

The currencies traded are:

• EUR/USD
• EUR/JPY
• EUR/GBP
• USD/JPY
• USD/CHF
• USD/CAD
• GBP/USD
• GBP/JPY
• AUD/USD
• NZD/USD

Trading foreign currencies is potentially challenging and profitable for all investors. But like everything else, this also has its risks and challenges.

Keep in mind…..
• There is no guarantee of income.
• You should have a positive attitude, patience, discipline, and motivation.
• Be aware of the risks and accept them.
• Do not trade with money you cannot afford to lose.
• Before you start anything take into account your investment objectives and experience level.
• Undergo a demo trading or a practice session for at least 6 months before you actually start trading.
• Find a good reliable Forex broker.

Penny Stocks are common stocks that are traded for less than five dollars a share. They are traded over-the-counter through certain quotation services. It is also referred to the stock trading that takes place outside any major stock exchanges or the stocks of small companies.

Penny stocks are considered to be very risky and highly speculative due to the following reasons:
• Small capitalization
• Lack of liquidity
• Limited following
• Limited disclosure
• Large ask-bid spreads
• Lack of financial reporting
• Fraud

Why is Penny Stock a high risk investment?

• Due to its potential for rapid growth and low pricing many new investors are lured to appeal of it. But they lose all their value as long-term investments. Hence severe loss can occur. So investors are advised to know the risks involved before going in for penny stock trading.
• A sudden demand for penny stocks or lack of liquidity can also affect the volatility of penny stocks. It can either make the prices go up or down. It can also be extremely difficult to sell these stocks at such times.
• Penny stocking companies have no listing or regulatory requirements. They also offer no protection or privileges for the investors.

Penny stock trading is one of the greatest ways to make some big money in the stock market. But you have to know what stocks to look for and how to approach them. They are one of the most manipulated and most volatile methods of investment in the stock market scenario.

How to trade Penny Stocks

Trading of Penny stocks is over-the-counter with the help of a broker. You need to hire a broker for both buying and selling your shares. So make sure you have enough money to pay the broker’s commission as well. You can also do online trading by opening a stock trading account and practicing till you are comfortable.

Penny Stock trading is unique and exciting. It is almost like running a home business. It gives you money as well as flexibility of time and you get to be your own boss.

In simple words, a stock market is a market where you trade your stocks. It is a public market where you can trade the shares of stocks and derivatives of a listed company at an agreed price or securities, which are listed in a stock exchange. It is a secondary market for the secondary holders of a company’s shares to sell their stocks to other individuals within the stock market system.

What is a share?

This is a piece of document issued by a company which entitles the holder to be one of the owners of the company. It can also be purchased from the stock market. A company’s stock price is not what the company is worth for but what the investors think about the price. You can either make a big profit by selling your shares or stocks or a major loss if you have sold your share at a price much lesser than your buying price. Each share is a piece of ownership and the more shares you own, you own more of the company. You can even have certain control over the company operations to a certain extent. Companies often issue different classes of shares with different privileges. This is a system where the investor and the company can get mutual benefits. The investor gets the returns and ownership for his shares whereas the company gets more money.

How to trade in shares?

•    With the help of a stock broker: You can trade your stocks through the stock market or the stock exchange with the help of licensed stock brokers. The stock brokers also have a network of sub-brokers who provide them with orders from small investors.
•    On-line trading: This is a recent method where you can buy and sell your stocks over the internet by setting up a brokerage account. This is very easy because you can do everything on your own rather than going through a stock broker.

Few Trading Pointers

•    Do not overtrade.
•    Have a trading plan.
•    Trade active markets.
•    Do not enter a trade if you are not sure of the trend.
•    Do not let your emotions rule you when you enter into trading.
•    When you lose do not blame it on luck.