Kyle Dennis graduated college and all he had to show for it was $80,000 of debt and no job prospects. His mom got him a job at a local realtor’s office, where he was able to save a few hundred dollars each month. He began to realize that he was never going to eliminate his debt that way. Luckily, a coworker, who was a day trader on the side, started showing him the ropes. Day trading soon became a very profitable hobby that made him much more than his passion for biology major ever could.
In a single day, Kyle’s account grew exponentially and he was able to claim 838,000 in profits in capital gains. Kyle got all of his information on the internet and was able to become a day trader without formal training in the field, and others can do it too.
Deciding What and When to Buy When Day Trading
Day traders make money by watching for minute price deviations in stocks, futures, currencies and options. They leverage large amounts of cash or cash equivalents to exploit the market changes. Here are some of the tools of the day trader.
- Liquidity leverages the ability to buy and sell and stock at a good price with tight spreads (the difference between bid and ask)
- Volatility measures the predicted daily price range, where a day trader operates. More volatility means greater risk of losing a lot of money along with a greater chance to make a killing.
- Trading volume shows how many times a stock is purchased or put up for sale in a particular period. High volume means there’s a lot of buzz or interest in the stock. Increased volume heralds a positive or negative price change.
“Beginners who are learning how to day trade should read our many tutorials and watch how-to videos to get practical tips. Experienced intraday traders can explore more advanced topics such as automated trading and how to make a living on the financial markets,” according to Day Trading For Dummies, a popular eBook for new and experienced traders.
Forex and Nadex are friendly platforms to begin on. It’s important to understand the various stocks and other assets available and to keep an eye on the market in order to be a successful investor. Not everyone can make over $800,000 a year day trading, but Kyle Dennis’ story shows that it can be done with a bit of luck and a great deal of initiative.