| Day trading most commonly refers to the practice of | | | | economy down and Mr Greenspan kept on raising the |
| buying and selling stocks during the day so that at | | | | interest rate to such a level that all optimism |
| the end of the day you don't hold any shares | | | | disappeared from the Market. |
| overnight; you sell as many shares as you buy. You | | | | Up until this time like clockwork 2 or 3 days a week |
| make money on the difference between the | | | | there were Stocks, mainly Internet Stocks, that |
| purchase and sales prices. | | | | would rise more than 30% early in the morning and |
| The main motivation for this style of trading is to | | | | then fall the same amount five minutes before |
| make money every day so you don't sit on the | | | | closing so people could take profit. |
| shares , plus of course you eliminate the risk that the | | | | If you were on the ball you could make a lot of |
| shares go down in value overnight. the motivation of | | | | money as a DayTrader. |
| this style of trading is to reduce the risk of holding a | | | | You could also lose a lot of money. |
| position overnight where the open price may have | | | | Those days no longer exist. |
| significantly changed from the previous day's closing | | | | It is very rare to see stocks vary more than 30% in |
| price. | | | | one day so the profit potential first of all is not as |
| NASDAQ defined day trading by saying somebody is | | | | great, and the ability to catch a percentage of the |
| a Daytrader if he makes more than four buy and sell | | | | increase in the price of a stock has also lessened. |
| orders over a five-day period. | | | | One of the reasons also is that Internet Stocks |
| Prior to the year 2000 it was not uncommon for | | | | which were totally overvalued are no longer |
| some of the most successful Daytraders to make | | | | overvalued and as a matter of fact have risen much |
| more than a million dollars in a single day. | | | | less than any other type of Stock. |
| There were dozens of Daytrading Chatrooms where | | | | Another reason is that there are very few IPO's and |
| people were "told" what to buy and when to buy it. | | | | even Google's IPO did not take off for quite some |
| Some Chatrooms had more than 500 members. | | | | time. |
| And most Daytraders, it is estimated as high as | | | | If it was not for the spectacular performance of |
| 99%, lost their shirt. | | | | Google , Internet Stocks lost more than 8% in 2005. |
| One of the reasons they lost their shirt is because | | | | Even Ebay lost more than a quarter of its value. |
| they could trade on Margin. | | | | However, if you are shrewd, you can still make |
| Trading on Margin means that the brokerage firm | | | | money as a DayTrader but it ain't easy. |
| which executes your trades will lend you up to 5 | | | | What do you think happens when a company invents |
| times your investment. | | | | a car that runs on water? |
| So if you had $10,000 in your trading account you | | | | If you could get news about this company very early |
| could in some cases trade with $50,000. | | | | you could make a lot of money. |
| However, if you lost on your trades, repayment was | | | | Not many people know that you can trade the |
| due immediately. | | | | NASDAQ Stock Market as early as 6 AM. |
| Since the heady dot com days of the year 2000 | | | | So if you are a Stock Market News Hound and like |
| DayTrading has gone out of style and out of range. | | | | to get up really early in the morning and have nerves |
| Most brokerage firms have gone under or have | | | | of steel you could buy the stock at 6 AM and sell it |
| consolidated, and staff has been reduced in the | | | | at 9.29 AM to everybody else starting a regular |
| remaining firms by about 80%. | | | | trading day. |
| Trades that used to cost $35 to execute can now | | | | This will not happen very often, the fact that there |
| be had for as low as $4.- | | | | is spectacular news. |
| Initially it happened because President Bush talked the | | | | But if you are patient it may happen once a month. |