Day
Trading Course
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(C) SureFireThing.com
2003-2011
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This
free online day trading course covers essential topics
such as:- 'What
is Day Trading', Types of trading, Who controls the
Market, Secrets to making money day trading, When to
open a trade, when to sit on the sidelines, Protecting
your capital, Mental obstacles to success in day trading,
Market Profile theory & its relevance to day trading,
and famous sayings by famous traders.
Everything
you need to get started in day trading can be found
here in this excellent day trading system. Enjoy!
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Day Trading
Course # 1
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What
is a Market
A market
is any arena in which buyers and sellers meet in order to
try and exchange their requirements. Day traders, of course,
are interested primarily in stock markets, which may actually
be the most 'perfect' of all markets, due to the extremely
large number of participants, and the (generally) strict regulatory
control imposed by higher bodies. The instruments which are
traded on markets include stocks & shares, bonds, options,
contracts and other derivatives. It is possible to day trade
any of the instruments that comprise a market, or even an
'index' of the whole market, a single instrument which reflects
an overall fair value of all the market's components. Some
instruments are 'liquid' (i.e. heavily traded), some
are 'illiquid' (i.e. thinly traded). As a principle,
it is best to avoid trading illiquid instruments, as you will
have trouble getting fills at decent prices. Market indexes,
almost by definition, are liquid and therefore suitable for
day trading.Once you have found a suitable day trading brokerage,
what do you do next? Study the competition - who else is trading!
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The participants
of a market are many and varied, and range from people like
you (day traders), trading for themselves, all the way up
to billion dollar funds managed by major corporations operating
on annual timeframes. To trade a market requires a day trading
account of some kind. Nowadays, most individuals who want
to trade use online services, which allow them to place their
orders over the Internet. More recently, a number of 'spread
betting' companies have appeared, who offer similar facilities
to day trade the markets, although their services are regarded
as betting, and hence avoid a number of regulatory and tax
issues.
Who
controls the market
The established
bodies who make millions everyday have a vested interest in
convincing us of two things. Firstly that the markets are
fair, simply reflecting the undeniable laws of supply and
demand, and that secondly, over time, all markets tend to
rise. In direct opposition to this you may have come across
individuals who appear paranoid, claiming that 'the markets
are rigged by the big boys' or even that 'the market itself
is out to get me!'. Such outbursts should be taken with a
pinch of salt. Even the biggest banks in the world can only
maintain a tenuous grip on something as large and powerful
as a stock market. The fact that since 2000, ALL the major
banks have been wildly off in their predictions for where
the markets will end the year indicates that they have no
better idea of where it is going than you or I.In fact,
in 2002, the BEST any major bank could do was to be about
40% off the actual year end prices. Not particularly tight
contol, is it?
As for
markets always rising over time, the answer is a guarded 'yes'.
The general rise in markets seems to be a reflection of the
increase in human economic activity, and over the last few
hundred years, that economic activity has increased exponentially.
As world economies boom and bust, stock markets go with them.
The relationship, of course is not as simple as this, but
nevertheless, there are good arguments for saying that over
time, markets tend to rise. From a day trading perspective,
whether a stock market rises or falls is irrelevant, as we
trade both long and short.
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