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Why You Should Get Into Day Trading and How

Koki Mashita | April 29th 2020 | Editor: Nichola Monroe

What is Day Trading?

In investing, there are short-term holds, mid-term holds and long-term holds. But day trading is shorter than any of these holds. For example, you would buy shares of a company ETF, Forex, etc. at 11am and sell at 1pm on the same day. You can either buy long or short, depending on your analysis and speculation. Unlike longer holds, day trading involves a significant amount of statistical analysis.

Why Day Trade Now?

Right now is an exciting time for day traders due to the volatility of the market and the overall market recovery. Volume of trading in the stock market has increased significantly due to the coronavirus. Many analysts also claim that the lowest of the stock market has already been reached in March. However, because the market has not begun recovering yet, day trading has become a new source of income. If you are new to investing, now is a great time and opportunity to get into day trading with more people working from home. It also does not require as much capital compared to long-term trades in order to generate a respectable amount per day.

How Can I Start?

When looking into day trading, you must learn to minimize risk on your trades. Of course not all trades are going to be profitable, however we must learn how to profit consistently. Some of the ways we started learning how to profit more often was by reading books on day trading and watching Youtube videos where they teach you how to perform detailed statistical analysis. You can also subscribe to a proper online course but it is expensive and usually not necessary. But the important part is to never trade before studying.

Currently, some day trading ETFs that are interesting to keep an eye on are ProShares Ultrashort Bloomberg Crude Oil (SCO) and United States Oil Fund (USO). SCO works as a polar opposite of USO. Whenever USO goes down, SCO goes up. It is especially interesting to look at this pair due to complications with oil prices lately. But you still must realize that although your trades may not be always positive, you may obtain a lot of knowledge along the way. It is advisable for you to start learning the MA Cross, Relative Strength Index, Resistance and Support, and candlestick patterns to get set up.

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Written for Lallic Partners

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