Online day trading education and advice

Day trading, the business of trying to make money by buying and selling stocks for oneself throught the day, is an extremely risky business. Where there is risk, there is reward. And where there is risk, there is also the potential for disaster. Here are some of the pros and cons of day trading.

Pros:

1.) You work for yourself. What better way is there to spend your working day than having nobody to answer to except yourself? You make your own hours, sit at a computer all day in your own house, wear whatever you want, and have the potential to make an unlimited amount of money each day. You can make a lot of money by noon and spend the rest of your day goofing off.

2.) The excitement. It can be quite a rush to buy a stock, then watch it travel up as cash register bells ring inside your head. It may not be quite the same as being on the New York Stock Exchange floor, but it’s probably the next best thing.

3.) Unlimited potential. When you go to work at an eight to five job each day, you know exactly when you will work and exactly how much you will be paid for that day’s work. As a day trader, each day is a brand new day as far as how much you can make. If you made $500 yesterday, you cn still make $10,000 today. Every day is a new beginning with endless possibilities.

Cons:

1.) You need a lot of capital to get started. If you are going to make any kind of serious money at day trading, you need to be buying at least 500 shares of a stock at a time. If you want 500 shares of a stock that costs $60 per share, you need $30,000 just for that one stock. You could buy very inexpensive stocks (like penny stocks), but your risk is much greater in buying stocks of companies that are not well known. Bottom line...it takes money to make money.

2.) You could lose a bundle! The overall stock market’s direction is dictated throughout the day on economy figures, analysts comments, interest rates, etc. It’s very common for an analyst to unexpectedly come out at some time during the day and make a prediction on the stock market or a certain sector. Even if your stock has been doing well all day, it can drop like rock in no time simply becuase of what somebody said. In other words, you may feel in control of what you’re doing, but that control can be taken away by a few simple comments or figures. And once your money is gone, it’s gone. Mistakes are learned the hard way in the day trading business.

3.) Steady income is difficult. You may make $1000 this week. Next week you may lose $1000. That means you’ve had the equivalent of no income for two weeks. If you can live like that, then fine. But most people can’t. While each day offers a fresh start, it also offers the possibility for fresh losses. It’s one thing to not make any money at your job (that would be volunteering). It’s another for you to lose money at your job.

Day trading is very glitzy and glamorous on the surface, and it can certainly be very financially rewarding. But underneath it all, it’s very difficult work that can cost you a lot of your own personal money. Weigh the risks and rewards against your current financial situation and future financial goals, and decide if day trading is for you.