Industry News - Day Trading News and Taxes

February 5, 2013
How to start day trading as a home-based business

With an increasing number of Americans getting involved with the national stock market and owning company shares, the popularity of day trading may also be on the rise. 

Day trading is a stressful, full-time occupation that relies on the traders' attentiveness and business savvy. Those who are not fully aware of the risks and rewards can stand to lose a lot, or gain very little. By fully understanding the intricacies of online stock trading, consumers looking to make money quickly will be more likely to do so, and may be able to successfully avoid financial pitfalls.

Day traders are not really investors
Those who are considered investors are shareholders that own a company's stock for an extended period of time, and experience both gains and losses as the market fluctuates. Day traders look to take advantage of a growing stock's momentum, buying as the figures begin to increase, and sell their shares as the stock begins to show signs of lessening value. Although day trading is a full-time occupation, in this sense day traders are not considered investors because they only own shares of company stock for a short time, and usually never overnight.

Large gains, losses can be seen
When trading stocks daily it is possible for many to continually see profits, however, inexperienced traders usually battle a learning curve and it takes some time to finally post positive figures at the end of the work day. Skills for watching numerous stocks simultaneously are slowly developed and anticipating downturns in a company's financial progress can be difficult to grasp. Borrowing money for day trading is generally considered a bad idea if gains aren't recorded for the majority of transactions made. Those beginning to trade stocks should only risk money they own, and would be comfortable losing. 

Good information is hard to come by
A number of organizations, websites and television programs make money by offering insights to various stocks and markets to professionals at financial firms and even home-based traders. As insider information is highly illegal, the tips there types of services boast can often be unreliable and in some cases, outright incorrect. Day trading is done at the own risk of the traders, and they should be confident they are able to make the right decisions regarding when to buy and sell their shares. It is a good idea for consumers to do a great deal of research prior to attempting to make money trading, and especially before trusting another group's advice.