The Ultimate Daytrading Guide: Invest Intelligently Step by Step And Earn Money With Stocks, CFD & Forex. HOMEMADE LOVING'S
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who can assess certain risks well can do so. The psyche can also be affected by day trading over time, as important decisions regarding investments have to be made frequently and within the shortest possible time. Of course, wrong decisions also have to be taken sometimes. To become a good daytrader you need a lot of experience, knowledge, nerve strength and stamina. This is the only way to earn good money in the long run.
Day trading offers the possibility of profiting from both rising and falling prices. If you buy a stock in order to sell it again at a higher price in the future, then you have taken a "long" position. So you benefit when the price rises. By contrast, day trading also has a "short" position. Logically, the day trader makes a profit when the price falls. In theory, this variant is a loan transaction, as the sale of a security took place before the acquisition. Accordingly, the day trader borrows a share and sells it again in the same breath. If the price falls, the day trader can even buy it back at a lower price. The difference is then of course simply booked as profit.
Many beginners invest too little time in this really complicated matter. Most beginners get an account with a broker, transfer a little money and click around a little in various platforms. If the first trades were sent without really thinking about it and questioning the individual facts, the money may be quickly gone again. The next point is that with such a small amount no reasonable risk management is possible, but this should be one of the most important points for a day trader. Usually the deposited money is then quickly gone, the beginner throws everything away again and in the end goes home again as a loser.
The fact is that day trading offers oversized profit opportunities, but the risks are also significantly higher. With a conventional investment you would of course have a lower risk. Anyone who sees day trading as an opportunity to get rich quickly and effortlessly in a short period of time will no longer trade in the near future, but rather start playing poker. That this principle will drive you to ruin is hopefully clear to you. So daytrading can be a job like any other. Even if you were able to get the first information and acquire knowledge, it will take a while to really understand how this business works in the long run. With a little patience and ambition, everyone can learn and understand day trading one day.
The difference between trading and investing
If one looks at the differences between trading and investment, one immediately notices that the two positions diverge in several aspects. In order to communicate the differences clearly, you should ask yourself whether you know a famous investor. Many people who have been involved in various stock market transactions for some time will certainly answer this question with "YES". A big investor you probably know at least from hearing is Warren Buffet. He is THE investor role model and one of the richest people in the world. As a teenager he started to invest his money in shares - with success. His good intuition helped him to buy cheap shares and to sell them afterwards at a high price. Warren Buffet has set up a few rules for this very simple principle, which you should always follow if you want to invest successfully.
The first rule is never lose money.
Another one: Always remember the first rule. And the third rule is: You should only invest in companies whose activities you know and understand.
Another famous investor is George Soros. He is known as a hedge fund guru and has the best track record of any investment fund in the world. He finds financial markets chaotic. Accordingly, he thinks that most people tend to make emotional decisions. The relationship between stock prices, bond prices and currency prices with the people who trade in the securities, i.e. buy and sell, is therefore important. Rational and logical calculations, on the other hand, tend to be of secondary importance, since the emotional reactions of people are the basic determinants. Opportunities arise with him through a thorough investigation of the companies. The prevailing prejudices of investors influence market transactions, which in turn affect the economy.
You have now met two well-known investors. But can you also name a known trader? There are successful traders, but they are by no means famous. Someone who is a bit more involved with daytrading, of course, knows a few names from this scene. But ask the ignorant if they know a famous trader. To get to the bottom of this, you should know some basic differences between trading and investing.
First you should know the respective definition of the words. Investment means the long-term storage of financial resources (i.e. money) in tangible and intangible assets. We're talking about a bond here. Trading, on the other hand, means nothing other than trading. If you want to take a closer look, you should look for the term daytrading.
Day trading involves trading in securities. This works on a short-term and speculative basis. Within one day, various positions are opened and then closed again. The aim is therefore to profit from price fluctuations. The objects that are considered in more detail in this trade: Equities, foreign exchange and derivatives. In addition to day traders, swingtraders are also active on the stock exchange. They keep different positions for several days or even weeks. Time plays a very important role in this case.
Another difference between investing and trading is the time perspective. While investing is more about a long-term commitment, as a trader you are more interested in short-term positions. When trading, the ownership period can last from a few seconds to a week. Investors are more likely to have a half-yearly commitment in mind.
The fundamental aspect also plays a major role in investing. For this purpose, analyses of corporate balance sheets are often used to generate investment ideas. Once you have thought about the situation for a while, you decide after careful consideration whether you want to invest in something or not. In order to make a decision and find a suitable entry, however, the chart technique can also be used.
When trading again the temporal classification is decisive. The trader, who sometimes only holds various positions for a few seconds or minutes, cannot do much with a fundamental analysis. The trader uses this type of analysis at most to get a rough overview.
Traders only trade stocks with a high fluctuation intensity. For this reason, they can earn considerable sums in a short time. This is why traders prefer to use derivatives to generate a lot of profit with a small amount of capital invested. At this point, you rather pay a price in the form of time value, financing costs and specified term.
Investors usually trade in a pure underlying asset, such as a share. Investors normally have large assets. If, for example, they invest 6 million in a share, they can collect a reasonable amount despite a small return. When investing, the portfolio partly also consists of several investments, so that here too derivatives can be used from time to time. Among other things, this has speculative intentions.
So there are differences between investing and trading. However, the borders usually seem a little spongy. Fact is: If you want to make a lot of money as a trader and reap success, you should get a hard coat. He should always have his emotions under control so that ill-considered mistakes can be avoided. The investor has it much easier at this point. But even he must not lose his patience.
What does a daytrader do?
Have you ever dreamed of getting rich overnight? I'm sure we all want that. There are some online platforms for day traders, or for investors who want to try to make even more money out of their money. Of course, this should also happen in a short period of time. Who wants to spend a lot of time when life is limited in time? So in a short time, if possible, a lot of money should be earned.
There are enough platforms that use convincing slogans to convince people that they can learn to trade in a quarter of an hour. The perfectly elaborated concepts should be suitable even for beginners. Many people complain about the banks, which apparently orient themselves too short-term, complain about the bankers, who would allegedly collect too many bonuses, but have nothing against themselves. However, most people are not critical of themselves at all. Some people invest their money with a foreign bank so that they earn one percentage point more in interest.
Others like to gamble themselves and overestimate themselves in a certain moment, so that with a little bad luck they lose all their money. More and more people dream of fast money. The number of