When we say day trading, what is the first word that strikes your mind? Is it gamble or a planned gamble? For those who believe that day trading is a gamble, then you must be an inexperienced layman who has never been to the depths of the stock market. For those, who believe that it is a planned gamble, then you must be old players of stock market who have made lots of money in the share market.
In a layman's language, stock market is a place where one puts their hard-earned money to risk. However, for stock traders, it is an adventurous trip that they like to go through on a daily basis. For beginners and inexperienced traders, let us get the detailed explanation for the concept on this type of trading. As the name suggests, it is a short term trading where all the buying and selling of stocks is made within a day.
Unlike long-term investments where people have to wait long for returns, trading daily is quite instant. Being instant, it is quite risky and can be more exiting and adventurous. Day traders buy a particular stock in a day and sell them according to the fluctuation in the prices. As such, day trading features small but instant returns.
Undoubtedly, when the fluctuations are high the risks are certainly high as compared to other investments. The tips provided by different sites and stock broking firms are major considerations for buying and selling of shares. It includes buying a share at a lower price and selling it at a higher price. In case this transaction is carried on to the next day, it no more remains day trading and thus, carries more brokerage charges as compared to day trading broking charges.
However, another term that features is selling short. In this process, the day traders sell the stock at high prices before they are officially purchased and buy them when the price goes low. This is a kind of selling the borrowed stocks for the trader.
Important features involved are the updates and tips provided by stock broking firms. Each hour the market news is updated and new tips are provided to the day traders. Each investment made in day trading is as planned as in long-term investments. The tips and predictions that are provided by the experts provide a strong base for the traders to determine their investments.
In case a company price is predicted to be at a hike, the shares are purchased when the market opens and shares are sold at the hiked prices. Also, there are other factors that influence the stock market such as the war condition, financial market of the country, imports and exports and so on.
Hence, to cut short, it can be said that it is not a gamble without thinking; rather it applies more brains than any other investments as a lot of immediate factors are taken care of while transacting any share.
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