The Best Thing About Day Trading – Trading Tips | Free Stock Tips …
Jul
03
The Best Thing About Day Trading
Posted in General, Intraday Trading Tips, Trading Psychology Email This Post
The best thing about day trading is it is scalable if your chosen financial instrument has enough liquidity. It doesn’t matter if you are an experienced pattern day trader or just starting to learn day trading, knowing that your skills are scalable is very motivating and inspiring to keep at the day trading game.
By scalable I mean the ability to increase your trading size at will. As an experienced pattern day trader you understand that you can start out trading 100 shares at a time and earn $100.00 per point move. You can also trade 10,000 shares at a time earning $10,000 per the same point move. This is why it is critical to only trade stocks and other financial instruments with enough volume so that you can scale to meaningful numbers when trading.
If you are just starting to learn day trading this may seem odd or inaccurate. However, it takes the same effort to trade 10,000 shares of a very liquid stock as it does to trade 100 shares.
Obviously, there is a different psychology to trading 10,000 shares than 100 shares but otherwise the transaction is exactly the same.
Traders need to remember they are up against institutions that consider 10,000 or more shares the same way you think of 100 shares. Everything is relative when it comes to financial markets.
When you first learn day trading, taking a loss on even 100 shares can be heartbreaking. However, as your skill level increases ramping up your day trading size become a must.
It all has to do with finding the best stocks for day trading that are liquid enough to scale to whatever size suits your account.
Please keep in mind I am not suggesting trading large size in an account that can’t handle a large size loss. My point is to trade to the size you are comfortable based on your experience, account size and psychological makeup.
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The Best Thing About Day Trading – Trading Tips | Free Stock Tips …
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