Day Trading - Traits of a Day Trader - Part 2

There are certain characteristics in a person that separate the line between successful day traders and easy losers. Apart from having good emotional control, above average I.Q. and having a good reserve of risk capital successful traders also have other characteristics that are quite hard to develop for some but are readily available for others. Here are some of these characteristics:

They have a definite business plan

All business people, including day traders, should have a business plan. This helps define what decisions to take when faced with a certain condition. This plan helps them make the proper decisions that will lessen their chances of bankruptcy while increasing the probability of earning. A business plan is a guide, more like a personal manual, that allows a person to look at his business in its most important aspects. Day trading is a business and should be treated as such. As much as you won't open any other business without a comprehensive plan, you should not also enter into this kind of trade without a list of your objectives or realistic expectations backed by a business plan.

They are good mangers of their money.

This trade is all about the capacity to deal well with money, the risk management and tolerance level to risks that could threaten your shares. The main idea, of course, is to multiply the money at hand. Second is to keep your money in your pocket. Successful day traders should be able to protect their own money or accounts, treating them as if they are the single, most important thing in the trading world. Next, they have to increase the money they have by earning in the trade. They simply cannot trade tomorrow if they aren't able to protect their money today. Yes, they take risks but the risks should be small enough that they won't mess up their accounts.

They live through the day.

Many day traders enter the trade with all their money at hand and leave without a decent bill, sometimes even with a debt. This is a common scenario but this should not be the case. Successful people in this field choose their battles, they don't simply look at the charts, choose which they think is most lucrative and place all their money in one place. They are conscious of their actions and they think hard on them. They don't just make easy decisions, with fingers crossed hoping that the trend will go their way.

Miodrag Trajkovic is an expert on information related to Day Trading, Day Trading Mistakes, Day Trading Strategies, Online Day Trading and Day Trading Systems. For more information visit his website http://daytrading.explore-me.com

AP - Fiscal fitness is knocking weight loss off the top of many New Year's resolution lists, thanks to 2008's market drubbing. That often means casting off last year's worst-performing mutual funds for more promising alternatives.

Daytrading Platforms
Free Stock Market Trading
After Hours Stock Trading

Moving Averages and Scalp Trading

Moving Average constitutes a very popular method of predicting the price trend or movement of an underlying holding. With its help, one can quickly understand the trend of a stock or currency.

Moving Averages smoothen out erratic movements in prices or charts. With this method, it becomes easy to see a clear picture about the behavior in the price of a security. This is a very simple and easy method of analysis and prediction. Though simple, it is extremely powerful in establishing the trend.

Short and Long Term Trend

Moving Averages are helpful in both short term and long term analysis. While as short term analysis is used to measure or smoothen short term trends, longer averages are used to measure or smoothen long term trends.

Scalp trading

This is used mainly for taking advantage of a very short term trading opportunity. By taking quick action for either making an entry or exit, day traders are supposed to engage in scalp trading.

Scalp traders are supposed to make several trades a day within a matter of minutes. The assumption behind this is this way a scalper can make quick little profits which will tend to accumulate.

Most important features of scalp trading are getting in and getting out quickly from a stock or holding, avoiding of overnight positions, low price spreads and commissions, fast reactions and intense concentration.

Moving Averages And Scalp Trading

Scalp traders can benefit from moving averages by following very short term DMAs of 5. With a short term moving average, moving above the long term average, one can go long. However, since scalpers are mostly day traders, for them when the longer term moving average goes below the shorter term moving average, they should go short.

In order to succeed in day trading, it is necessary that traders use both longer term moving and shorter term moving averages. Two or more moving averages will have to used for the purpose of trading. One can use any type of moving average like simple, weighted and exponential.

The concept behind moving averages is quite simple. When the actual prices are rising, these will be above the average. That could indicate a buying opportunity. On the other hand when the underlying prices are below the average, that indicates falling prices and possibly a bearish market.

By constantly comparing average and underlying prices, scalping traders can take appropriate positions. They can fix several points and in between these, they can make an idea about the underlying current in the prices of a stock or currency.

Precautions For Traders

Combining moving averages with day trading involves a quick grasp of the stock prices. In order to be successful in this strategy, it is necessary that one constantly undergoes a learning and educational cycle. It also demands constant practice and trial and error.

The most important factors for this are perfect timing and attention. It should be expected that there are high costs involved in the same and this could be stressful. Traders will have to constantly obtain data, plot them on maps and graphs, understand the movement and quickly react. This could be very intense and stressful.

Traders, who can quickly read, locate breakouts and trends and take quick position, can reap good benefits.

The author has background in business, economics and finance. He is presently researching in finding ways to make money and working on the following website and blogs:

http://www.businesses-jobs-careers.com

http://makemoneyplans.blogspot.com/

Reuters - The assets of failed U.S. mortgage lender IndyMac are being bought by a group of private equity and hedge fund firms, including Dune Capital Management and J.C. Flowers & Co, which are putting up $1.3 billion in cash.

Learn Stock Trading
Learn Online Forex Currency Trading
What Would Scooby