Day Trading consists of realizing small capital gains using high leverage and multiplying transactions to maximize returns. Thus, a day trader should be able to benefit from the market’s volatility and will be content with gains between 0.5 and 3% percent on each transaction. Some investors tackle several dozen orders a day.
Anything above that small percentage isn’t bad. In fact, traders welcome the bigger returns because it’s more money in their pocket. To learn more about Rockwell Trading, continue reading.
Each position that ends at the close of the market doesn’t necessarily constitute losses. Day traders will not hesitate to take losses when necessary; however, he or she will not wait to lose 10% on their position. The goal of the game is to have more winning “trades” than losing ones and ensure that when they lose, the losses are as small as possible.
With what capital to start?
The minimum amount needed to start day trading is not very large. Indeed, unlike traditional stock market investments, traders will leverage (on equities or futures) that multiplies their financial possibilities and concentrate on a few trades only. It is not uncommon for the day trader to be concerned with one trade at a time but trying to gain maximum leverage.
Consequently, a budget, even a modest one (a few thousand dollars), may suffice. It will just be enough that the brokerage fees do not amputate the person’s small percentages of gain.
Which broker to choose?
This step is filled with choice after choice. The truth is that brokerage fees are very low; in fact, imagine that the returns cost you 2% in expenses. Since traders play on small variations, it will be very difficult for them to recover their expenses and, therefore, the only person that will gain anything will be the financial intermediary.
But beyond the cost of transactions, the quality of service is of paramount importance. Traders will need to make sure their broker has quick access to the market, is not bottled up at peak times (opening or closing the market), that his or her computer system is reliable and that they have the possibility to go through other channels: telephone, mobile, fax.