A lot of people have the dream of making day trading their career and although day trading does have a number of risks making a living trading stocks is possible. To make a career from day trading the person needs to have a strong base of knowledge and it helps if they have a little bit of a sixth sense. Throughout this article how someone makes a career from day trading starring Marty Forex.
At the start of the business day, Marty Forex selects 100 shares of Forex-Trading Inc. He knows from watching the trends that Forex-Trading is about to make a big move upward, and he is right, the stock gains at least a point by noon of that day. As a day trader, Marty wants to walk away with profit by close of business, so he sells off this upward moving stock and splits up the profits from the sale. Part of his profits goes into his day trader account to make sure that he will meet his minimum equity; the other part goes back into investing. He has had his eye on another stock that is set to make a nice upswing as well. Marty is successful, because he is careful and because he knows how to read the stock signs.
Lets say that Marty Forex made a $100 for the before mentioned trade (I am using this amount for simplification reasons) chances are Marty would us half of it to cover capital and half to put forward to future investments. Of course, no one in the day trading game is doing any investing with $50; again, this figure is simply for illustration. If Marty makes five similar trades for the business days, with the same results, he will have made $500 of profit. Keeping with that trend, trading five days a week would net Marty $2500 of profit per week. (Commissions, overhead costs and other business expenses, realistically bringing the amount down to $2000 or less would reduce this figure.) This is still a nice bit of profit, considering that this is only one stock’s trade performance. Marty Forex probably handles quite a few more trades than that in a typical day’s time.
Considering that not every trade will make a profit, let’s say that Marty handles ten stock trades per day, with the same profit margin as above. ($100) On the safe side, we will give Marty a win percentage of say, 30%, which means that for his ten trades, he sees that profitability factor on three of them ($300). Which will bring him to $1500 for the week, less the commissions and other expenses as mentioned above. Realistically, Marty can see a profit of slightly less than $1000. But, Marty is aggressive, so that amount will not satisfy him. He will hit the charts and study until he finds the right stocks that are about to trend upward. He will work until he gets his win percentage up near fifty percent or even higher. Welcome to the wonderful world of day trading.
Day trading is like any other profession where as the more education and knowledge that you have the better off you are going to be. In my opinion a person should treat Day trading like brain surgery where one mistake can cost you dearly. With the explosion of the internet age there are a ton of resources and materials out there that will increase the chances of success.
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