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Archives for day trade Forex

Here you will find archived content about day trade Forex found throughout the website.

Everything Forex Trading Part I of II

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Everything Forex Trading Part I of II

The Foreign Exchange is also knows as currency trading, Forex, or simply FX. In Forex trading every currency worldwide is traded in a global market. With an average trading volume of $5 trillion per day, it is the most liquid and largest market. All stock markets combined don’t even come close to this number.

With such high volume of trading, you may find some great oportunities for yourself in the forex market.

A single USD on any given day could get you 1.1 CAD. The very next day this USD could get you 1.15 CAD. Small changes such can these might not seem like they’d make a difference, but when put on a large scale, the significance becomes apparent.

Lets use an example of a company who pays employees overseas. Imagine what currency exchange rate could do to the company’s bottom line. Lets say for example, they are exchanging one currency for another that is at a higher value. It would be beneficial for the company to make their trade on a day when the exchange rate is lower. If the company needed to exchange USD to CAD, using the example above, it would greatly benefit the company to make their exchange on the day where CAD is 1.1 rather than 1.15. Pennies will add up quick when on a large scale.

Like being a business owner or traveler, when trading forex, you will want to make trades with the knowledge of when exchange rates will change to receive a more favorable rate.

FOREIGN TRANSACTIONS

Foreign transactions in the market are similar to what you may have done if you’ve traveled abroad. A trip north across the border and you are converting USD into CAD. The exchange rate between the two currencies is based on supply and demand. This is what determines how many CAD you get for you USD and the rate of this exchange is constantly fluctuating.

OPPORTUNITIES IN FOREX: WHAT’S YOUR OPINION?

Like stocks, currencies are traded based on what is their assumed value and what direction that value is headed.

The big difference in forex vs stocks is that trading up is done as easily as trading down. Because the market is so large it is easy to find a buyer or seller for the currency you have your eye on. Based on what foreign news you hear, you can decide the value of certain currency and then buy or sell as you see fit.

If you hear news that will cause the CAD to lose value then you would sell your CAD against another currency. The more the CAD depreciates agains the currency you sell it against, the more profit you make. If the CAD begins to regain value then you begin to lose profit and should quickly get out of the trade.

Read more about how to buy and sell currency as well as information on trading on margin in Everything Forex Trading Part II…

Day Trading: How to Know when to Buy or Sell

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How are you supposed to know when to buy or sell?

The overall goal of Day Trading is to exploit small movements in individual assets. The first big step towards this goal is knowing what to buy and when to buy it.

Looking at the liquidity, volatility and Trading Volume of an asset will help you asses if a trade is both profitable and right for you. Below you will see descriptions of what these things are, and learn how they can lead you to success. 

The first thing on the list to look at is the Liquidity of the asset.

Liquidity is what will allow you to enter and exit the trade at a favorable price.

Two things to note when assessing Liquidity are Spread. Liquidity is the difference between bid and ask. Slippage is the difference between the expected price of a trade and the actual price at which the trade is executed. You want to look for a tight spread and a low slippage.

Volatility is The next thing you will want to take into consideration when looking what to buy and sell.

The volatility will help you know when to buy.  It gives information on the expected price range. When Day Trading, a larger range in price will mean greater volatility.  This will result in either greater profit or greater loss.

Don’t forget to look at the Trading volume.

The trading volume is what tells us how many times a certain stock has been bought and sold. Volume is measured over a specific amount of time.  

If the trading volume is high this means a stock has a lot of interest. An increase in volume it is usually a sign of a price jump. After looking for this dumb you can better asses your trade. 

In Conclusion
These three things will help you a lot as you begin to decide when to buy and sell. Knowing how to observe the Liquidity, Volatility and Trading Volume  will be a great help to you as you get started in the world of Day Trading. 
 

Day Trading: 3 Tips on Deciding When to Sell

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Deciding when to sell is a key element to being profitable when Day Trading.

There are many ways for you to approach an exit and come out in a winning position. Four ways to do this is to use profit targets, daily pivots and momentum.

The most commonly used exit method is probably using profit targets. When using profit targets, you are exiting at a pre-set level.

There are strategies to help when choosing profit targets. Of these strategies, Scalping is the most used. When scalping you are selling right after the trade becomes profitable. The Profit target when scalping is whenever the trade begins to make you money.

Another strategy using profit targets is Fading. Fading is involving shorting stocks right after they begin to take an upward turn.

When using this technique, you are assuming three things. First you assume the assets overbought. You also must assume that those who bought early are ready to take their profits. Last, assume that those who are currently buying may be scared off the trade.

Fading is a risky strategy but can really pay off when successful. What you are watching for when implementing this selling strategy, is signs that the buyers are stepping back in. This will give you your price target.

Daily Pivots is our next usefully strategy when deciding when to sell. Daily pivots is benefiting from the asset’s volatility.

Profiting from Volatility is achieved by buying when the price is the lowest and selling when the price is at it’s highest point. You’re price target when using daily pivots is when you see a reversal begin.

Using Momentum of a trade can be very beneficial for traders. This involves research. Knowing which trades will be trending and popular puts traders ahead. Reading news articles and staying up to day on current events will help you know which way the market is moving and allow you to strategize successful trades.

One way to trade using Momentum is to buy based on news releases and then sell when the trend turns. There is also another popular way to trade using momentum. This is to fade a price surge. When fading a price surge your price target is when the volume of the asset begins to lower.

Defining a strategy when deciding when to sell is important. Your strategy should be repeatable and tested. This will lead to success when Day Trading.

10 Tips for Day Trading Success: Part 2

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Welcome to DayTradeFeed.com’s 10 Tips for Day Trading Success: Part 2. Make sure you don’t miss out on the tips we discussed In 10 Tips for Day Trading Success: Part 1

Tip #6 Timing is Everything

The majority of orders are made in the market’s first thing in the morning.  This helps contribute to the market’s volatility which Day Traders thrive off of. With practice you may be able to see the market patters and pick the best times to make trades, but for beginners its better to wait a 20 minutes or so before making your first move.
During the middle of the day, the market is more stable, but towards the end of the day there is another volatile period before markets close. The volatility of early morning and late afternoon markets are tempting as they provide more opportunity, but we caution beginners to avoid them until more knowledgeable.

7. Use Limit Orders

Figure out your enter and exit strategies. You may use Market Orders which are fast and reliable, or Limit Orders that will give you more control over the execution price. I
If you choose to use a market order there will be no price guarantee as it is executed at the best price available at the time. Going the route of limit orders, however, will give a guarantee on the price but not necessarily the execution meaning the trade may not go through at all.

8. Patience is a Virtue

Whatever strategies you use, make sure you are patient and consistent. Your strategies may not work every single time but the average will lead to day trading success. It is not uncommon for professional Day Traders to win only 50% or 60% of their trades. Be sure that you are limiting your risk, and your methods very well outlined.

9. Keep your Cool

There will absolutely be times when the stock markets get at your nerves. To see success when day trading you have to trade without emotions. Don’t let things like hope, fear and greed influence your decisions. You will be most profitable in you make moves based on logic.

10. Keep on Keepin on

It is important to move fast if you want to be a Successful day trader. Moving fast, however, does not have to be stressful. You’ve now read the first 9 tips, and you understand what its going to take to be profitable. Get your strategy locked in. Practice patience and discipline. If you do these things, there will be no need for stress and anxiety.
Don’t forget he Day Trader’s mantra: “Plan your trade and trade your plan.”

How Much Money Can I Earn Day Trading?

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HOW CAN I MAKE MONEY DAY TRADING?

How much money can you make day trading? Great question.

Day traders are not required to disclose their trading results to anyone but the IRS and because of this it is tricky to come up with an average of how much you can make. There are many strategies in trading. This, along with how much capitol traders are working with, must be taken into account.

In their 2011 research paper “The Behavior of Individual Investors,” Professors Brad M. Barner and Terrance Odean at University of California, Berkeley discuss how those who traded without diversified portfolios usually saw an average loss of money. There are also fees with transactions, so it is really important to have that proper education before attempting to make money during day trading.

HOW CAN I MAKE MORE THAN I LOSE?

The best way to assure that you are making money day trading and not losing money is to set stop/loss points as well as profit taking points. It’s important to not make too much of a gamble for an individual trade. The goal is to never allow one bad trade to ruin out your account.

Many full time day traders suggest that to make money day trading you should not risk more that 1% per trade.

Therefore, if you are looking at an account with $30,000 in it, the most you should be risking on a single trade would be $300. Using this 1% strategy will lessen your losses. This takes practice and discipline and will help you to make more money day trading.

A QUICK EXAMPLE

Let’s expound on the above example to see what setting stop/loss points looks like.

If we stick with a $30,000 account,  We are able to risk a maximum of $300 for a single trade. Let’s say the stop/loss is $0.04 and if the share price below $16 ($120,000 buying power/7,500 shares).  With this, we can take 7,500 ($300/$0.04) shares per trade to and stay within our $300 allowed.

Keep in mind this does not include Broker commissions.

FINAL THOUGHTS ON MAKING MONEY DAY TRADING

It would be wise to first ask yourself what you want from Day Trading. What kind of time are you willing to put in?
Using a Broker is a wise route if you and unexperienced, but they do take a commission which will cut into your net profit.  They are a more secure route, but even with a broker we don’t suggest looking at day trading like a hobby.
Day trading takes some serious discipline and training. The strategies are not 100% and there is always a risk. There is no guarantee that you will make money day trading or be able to predict your average rate of return over any period of time.
There are, however, some solid strategies. Mastering these will help you make that extra money you’ve been dreaming of. Contact us at DayTradeFeed If you are ready to commit to learning the strategies that can lead to success in making money day trading. Our personal Coaches can answer whatever questions  you may have.

A Month’s Day Trading Results | DayTradeFEED.com

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Day Trading Results

Total Month’s Profit: $1,050

First of all, let me apologize for the delay in posting my Day Trading results. The month has been pretty busy for me with some vacations and business ventures (all funded by day trading, of course) but I’m excited to get back into the swing of things.

It was a decent month for me. Not my best month, but also not my most traded. In the coming months I should have more time to devote to trading and will make sure to get these results out a little more quickly than in the past!

Explaining Our Day Trading Results

Before we show you our day trading results, we always make sure to explain exactly which trades these results are coming from.

As we trade throughout the day, we record our trade results to post later on. These trade results come from all kinds of different strategies, including ONIT trades, SAT trades and normal daily trading.

When we say “ONIT,” we mean the Overnight Impact Trade. Similarly, when we say “SAT,” we mean the Sunday Afternoon Day Trade.

The ONIT is made Monday through Thursday, usually around 3:00 p.m. MST, and the SAT is a similar trade, but only made on Sunday afternoons. The trades are forex trades, and are placed on the EUR USD. Each trader simply sets the trade and forgets the trade each day, and watches the profits roll in.

Many traders swear by these trades, and this is one of the only places you can find them!

To learn more about this daily trade, contact us!

Now for Day Trade FEED’s day trading results…

Day Trading Results | Day Trade FEED

Day Trade FEED’s Day Trading Results

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $150 during the month.

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $300 during the month.

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $450 during the month.

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $600 in the month.

 

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $750 in the month.

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $900 in the month.

Daily Trades: 3
Pips Per Trade: 10
Total Pips: 30
Lot Size: 0.50
TOTAL PROFIT: $150

Placing these Overnight Impact Day Trades, Sunday Afternoon Day Trades or regular day-to-day trades would have made you $1050 in the month.

In conclusion…

What would you do with an extra $1,050 each month?

We are Day Trading, Forex and Futures specialists, and love all things day trading! You can find more information on day trading education systems by contacting us!

Want to be notified when we post our day trading results? 

    “IMPORTANT NOTE: Trading foreign exchange or futures on margin carries a high level of risk. It may not be suitable for all investors. The high degree of leverage can work against you. It can also work for you. Before deciding to trade foreign exchange or futures, you should carefully consider your investment objectives. Also check your  level  of  experience and risk appetite. The  possibility exists that you can lose some or all of your initial  investment. You should not invest money that you can’t afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading. Seek advice from an independent financial adviser if you have any doubts or questions. Past trading history does not indicate future trading success.”

    Huge Mistakes Made When Choosing a Day Trading System | Part 7

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    Black Box or Robot Trading

    Why Black Box or Robot Trading systems can be attractive.

    These automatic trading systems can be connected to Americans and the type of people they are becoming as a whole.

    When it comes to investing, the obvious, perfect choice would include little risk, almost no required effort and high returns. Unfortunately, this perfect system doesn’t exist in today’s market. If you come across something or someone promising this type of return, it’s likely to hurt all involved.

    As the world’s technology advances, so does the market’s. Predictions and promises regarding artificial intelligence and its capabilities are a dime a dozen. This is perhaps why “Black Box” or “Robot Trading” is rapidly becoming the most popular form of trading.

    The playing field is leveled, even for Black Box or Robot Trading systems.

    In 2008, the S&P 500 hit record lows. Due to these lows, just about every automated system in existence became completely irrelevant.

    This was obviously a difficult time for many. However, in the overall scheme of things, times couldn’t be more exciting. Why? Because the playing field had once again become level.

    Trading floors, stock advisors and day traders alike were forced to reevaluate their trading systems. Those who were depending on automated systems quickly learned how difficult it was for these robots to adapt to new market conditions.

    The worst part? It all should have been expected, as the markets were showing patterns no one had ever seen before. The industry had changed forever.

    What else makes Black Box or Robot Trading systems unreliable?

    Most creators of these systems include very little live testing in their development. Some even go out of their way to avoid it.

    What does this mean? Unfortunately, it means these systems are created using old data and past results. While this makes them look more attractive to potential clients, it’s very detrimental in the long run.

    It’s easy to make a system based on old data look profitable. A few tweaks can make a world of difference. However, the 2008 market change we just discussed forced computers to begin adapting at an exponential rate.

    So how do Black Box or Robot Trading systems keep up?

    Honestly, we’re yet to find one of these systems capable of adapting at the necessary rate.

    While systems based on back tested results are easy to find, it’s rare to find ones based on long term running data. Because of this, one of two things usually happens:

    Option A – The system stops running correctly. Profits cease and the system halts

    Option B – The system loses so much money so quickly that it’s impossible to halt before zeroing out.

    When you hear of a trading system attached to the terms Black Box or Robot Trading, think of it like you would a wolf in sheep’s clothing. For example, someone running a ponzi scheme could easily promote it as this type of automated trading system.

    Why? We just went over it. Profitable systems based on back tested data are incredibly easy to falsify and recreate.

    I recently heard of a man who claimed to run an automated, robotic trading system. However, he was actually trading the money himself. Why would he do this?

    Because of what Americans are becoming as a people. Consumers seem to flock to these systems because they promise little risk and high reward. But true traders know their own system is more reliable.

    Please understand that  I’m not saying a legitimate Black Box or Robot Trading system can’t exist. But if it does, chances are it’s too expensive for any single trader to use.

    In conclusion, beware of Black Box or Robot Trading systems!

    When you come across these systems, see what the long term plan is. Make sure you’re not being used to test a faulty system before it’s sold to trading floors, institutions or wealthy private investors.

    Find Day Trading Information Through DayTradeFEED.com!

    This article is the final part in a series aimed at helping day traders understand what mistakes to avoid.

    First Mistake: No Ongoing Support/Education

    Second Mistake: No Specific Way To Replicate Results

    Third Mistake: Repeating Key Entry and Exit Strategies

    Fourth Mistake: Paying for Trading Seminars, Books & Videos

    Fifth Mistake: Make Money Day Trading (System Not Compatible)

    Sixth Mistake: Pitches that Win Now, Lose Overall

    Six-and-a-halfth Mistake: Poor Relationship with Brokers

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      Huge Mistakes Made When Choosing a Day Trading System | Part 6.5

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      Poor Relationship with Day Trading Brokers

      Obvious Facts About Day Trading Brokers

      This may sound obvious, but when a trader doesn’t trade, they don’t make any money. What you may not think about is the fact that their broker doesn’t make any money, either.

      The best, most successful trading systems are usually accompanied with an incredible relationship with a broker. These relationships are key indicators of how successful a system can be.

      If the relationship is strong, it usually means the broker is happy. If the broker is happy, it usually means the trader is making profitable trades, putting money in the broker’s pocket.

      While the above scenario is true in most cases, there are still brokers who will want a relationship with traders regardless of how many trades they make. They’ll even go as far as making sure to portray inactive traders in a positive light and offer low rates in an attempt to gain client referrals.

      What To Look For in Day Trading Brokers

      When researching a system, there are specific things to look for to determine credibility.

      For instance, some educators make more money charging you as an Introducing Broker as opposed to monthly fees. Most brokers set aside a certain amount of money for these Introducing Brokers, who in turn, are registered to profit from client referrals.

      The biggest problem with this scenario is that many of these educators have relationships with brokers who pay the most for referrals, instead of brokers who will best meet the needs of clients.

      Experience in this area has shown it can be a double-edged sword. One way to recognize an Introducing Broker system is to determine how conservative they are in their marketing. Everything these individuals do is monitored and regulated, so the more conservative, the more likely.

      In contrast, educators who aren’t Introducing Brokers will usually identify the best places to trade because they have no incentive to lead you elsewhere.

      Additional Overlooked Factors When Choosing Day Trading Brokers

      Books, videos and seminars which offer full courses on trading tips and techniques are a very common education tools. Unfortunately, a lot of these resources fail to reference the steps necessary for setting up a broker account.

      Additionally, it may surprise you that even some of the largest trading platforms on the planet don’t offer phone or email support.

      If you’re researching a system and the educator doesn’t provide videos, ongoing support or live help in regards to setting up a broker account, the education likely won’t translate into actual trading.

      That being said, the industry as a whole is getting better in this regard. Most online brokers now offer support options, but even these don’t typically cover all the bases. Before making any type of payment, make sure you’re getting more than just a generic education.

      Day Trading Brokers on Taxes, Retirement Planning and Interest

      You may find it difficult to locate any type of information on taxes, retirement planning and interest in day trading.

      Taxes are a big part of trading. Tax implications can be significant for trader, depending on how their account was set up of course.

      To combat this, many traders set up corporations to trade with. This may or may not be the right step for you. As you’re choosing a system, make sure you have information to help you navigate this.

      Retirement planning goes hand-in-hand with taxes. There are a lot of ways to integrate your account with Traditional IRAs, ROTH IRAs and other tax beneficial strategic investments.

      Brokers work with their type of accounts, but often neglect to mention this integration capability.

      Be aware that most of these accounts require higher minimum balances to start.

      Find Day Trading Brokers Through DayTradeFEED.com!

      This article is only part 6.5 in a series aimed at helping day traders understand what mistakes to avoid.

      First Mistake: No Ongoing Support/Education

      Second Mistake: No Specific Way To Replicate Results

      Third Mistake: Repeating Key Entry and Exit Strategies

      Fourth Mistake: Paying for Trading Seminars, Books & Videos

      Fifth Mistake: Make Money Day Trading (System Not Compatible)

      Sixth Mistake: Pitches that Win Now, Lose Overall

      Subscribe below to be notified of future editions.

        Huge Mistakes Made When Choosing a Day Trading System | Part Six

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        Day Trading Education – Pitches that Win Now, Lose Overall

        After a number of years in the trading industry, it’s difficult to avoid criticizing every little detail of various education systems. At a certain point, it seems as though you’ve heard it all in regards to companies selling their systems (and the questions that come from potential customers of said systems).

        You even begin to see an almost political sense of loyalty begin to form between traders and THEIR system. Rarely does a trader admit, openly, to the flawed practices which they adopted at one point or another.

        I recently heard a pitch so convincing that the educator didn’t even really sell an actual product. His system consisted of making live trades and explaining why certain decisions were being made and why.

        Most “educators” who follow this model have 12-20 years of experience in trading and, as mentioned previously, cannot actually replicate their system because it made up mostly by personality traits instead of technical coding.

        Day Trading Education – Buzzword: “Accuracy”

        “Over 75 percent accuracy,” the salesman says. Your eyes light up as you wonder whether or not he’s telling the truth. Surprisingly, the answer is most likely yes.

        But beware of the word “accuracy,” which will always be used as a tool in selling a system because of its ability to be manipulated.

        For example, you may find systems that are only actually accurate 15 out of every 100 trades. These systems still claim higher percentages because their trade structure outweighs the 85 losing trades with the 15 winning trades.

        The opposite can also be true. A system can be successful on 95 out of every 100 trades, but still lose money overall because the trade structure outweighs the 95 wins with the five losses.

        After hearing the word “accuracy,” the best practice is to always make sure to see what the actual overall profit/loss is.

        Day Trading Education – Buzzword: “Guarantee”

        Another buzzword traders often hear as they research trading systems is “guarantee.” This is obviously in regards to pricing or satisfaction quality, as it is neither legal or ethical to make future guarantees on profits.

        Again (just to be clear),there is only one type of establishment which can promise specific returns: federally regulated banks. Not one mutual fund, 401k, stock or trading account in existence can guarantee future profits.

        Day Trading Education – The Total Rip Off

        Occasionally a potential trader can come across a trading and education system that is a total and complete rip off. While this becomes more and more rare as time passes, it’s still a possibility.

        In most cases, these systems promise huge profits on little effort from the trader. Money is exchanged, likely never to even be invested.

        There are certain safeguards which are continually being put into place to help guard against this type of fraud, including federal laws requiring risk disclaimers on all trading websites and online entities. However, it’s still important to keep this in mind when searching for your system.

        Day Trading Education – Beware of Salesperson

        “Even a monkey could trade this,” is something a presenter might say while showing you a trade system demonstration. This may sound like they are trying to convince you, but in a sense, they could be right.

        A study was conducted years ago involving a human and a monkey. Both sat in front of a computer and asked to trade for a specific duration of time. By the end of the experiment, the monkey had made more money than the human.

        Obviously, results from the case above are rare, and should be taken lightly due to it being a single instance of the experiment. If it were run 1000 times, results would surely differ.

        The main takeaway here is that education salespeople will do anything to make trading look easy, which the reality is that it simply is not. In certain cases, new traders can remain profitable for a short period of time, but that doesn’t mean their strategy is perfect.

        A good thing to remember for new traders is to practice trade execution for a minimum of one month prior to increasing leverage and trading substantial funds.

        Conclusion: Day Trading Education

        In conclusion, day trading education is not something to take lightly. While many people learn and make a living day trading, others make their living by selling faulty and outdated education products. Here at Day Trade FEED, we’re doing our best to make sure everyone who is interested can learn to day trade without navigating all the tricks of the sales trade. 

        When choosing a day trading system, make sure to use the product as much as possible before paying for it. Do this by using free demonstrations, trial periods and other forms of test drives.

        Remember, if an education system doesn’t allow you to try before investing, it may not be worth your time.

        Trading is something that is difficult enough without trading platforms and software companies misleading you.

        Find Day Trading Education Through DayTradeFEED.com!

        This article is only part six in a series aimed at helping day traders understand what mistakes to avoid.

        First Mistake: No Ongoing Support/Education

        Second Mistake: No Specific Way To Replicate Results

        Third Mistake: Repeating Key Entry and Exit Strategies

        Fourth Mistake: Paying for Trading Seminars, Books & Videos

        Fifth Mistake: Make Money Day Trading (System Not Compatible)

        Subscribe below to be notified of future editions.

          Huge Mistakes Made When Choosing a Day Trading System | Part Five

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          Mistake: Make Money Day Trading (System Not Compatible)

          Make money day trading. Don’t kill profitability with a lack of funds.

          Two things that have nothing to do with a trading system itself can affect trading in a significant way:

          1. Liquidity

          2. Market Being Traded

          Some systems claim to see the same results regardless of  liquidity or which market is being traded, but the only way for this to be true is for the trader to have a significant account funded from the beginning.

          The truth is that profits are capped by these two principles in every market. On one hand, Forex market caps are traded in billions of dollars. In contrast, traders being capping out at around $5,000 in futures markets.

          How to make money day trading, even with Forex caps.

          Around $3 trillion is exchanged in Forex markets on a daily basis. Because of this, many traders will never have to worry about caps in terms of profitability. However, minimums balances do still exist, albeit usually at a relatively low rate.

          Many brokers offer what is called a “micro account.” These allow traders to open a trading account for as little as five dollars. These offers usually charge more in spreads, but make trading available to just about anybody.

          Typically, brokers prefer a normal account to start around $500. These accounts offer lower pip spreads, but keep in mind that profits are taken at the beginning by setting you however many pips behind your entry to pay the spread difference.

          How to make money day trading, even with Futures caps.

          The Futures market isn’t for everyone due to a required minimum standard balance set by the Commodity Futures Trading Commission (CFTC).

          First, it’s important to remember that most brokers will not allow you to open an account with less than $5,000. In addition, contract margins can vary from $500 to $6,000 per contract traded. These parameters are set to prevent losses that traders aren’t able to cover.

          The Futures market is also a little more unreliable in terms of liquidity. Take the S&P 500 vs. Silver Futures for example. The S&P involves many more traders, which means there is more opportunity in the market to make profits without “slippage.”

          “Slippage” is defined as a change in price which occurs due to a lack of participant reaction instead of an abundance of it. When these markets slip and there isn’t enough traders participating, your trade must wait until the prices moves far enough to pull you out completely.

          In turn, this can result in huge losses and/or little profit.

          Conclusion: how to make money day trading.

          In conclusion, while Futures markets remain a great place to trade, please make sure you have the correct knowledge and experience to correctly navigate the practice. A good place to start is to make sure you know about specific trade times and overnight margin requirements.

          The best type of educator of trading system will already have direction on which market fits your individual financial situation and the leverage at which you should be trading.

          How to make money day trading with DayTradeFEED.com!

          This article is only part five in a series aimed at helping day traders understand what mistakes to avoid.

          First Mistake: No Ongoing Support/Education

          Second Mistake: No Specific Way To Replicate Results

          Third Mistake: Repeating Key Entry and Exit Strategies

          Fourth Mistake: Paying for Trading Seminars, Books & Videos

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