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Trading to Profit in Uncertain Markets It is becoming difficult to make money trading medium to long term due to the market's lack of direction. For the serious trader there is a place for day trading if they have the time and are the correct personality type. Day trading has been around for decades. But the hype and some trader's gambling attitude towards day trading has kept many traders away. Day trading is not gambling. It is a serious business of buying or selling a commodity with the purpose of closing that trade before the day is over. It requires markets with good liquidity and a large daily price range such as index futures and currencies. The daily trading range is very important as it determines the profit potential of your trading day. We are concerned with the amount of dollars a market moves during the day. The list below gives the average potential dollar movement per day per contract:
As you can see, there are good trading opportunities in all of them. Traders are attracted to day trading because:
The disadvantages are:
On
the surface day trading looks easy and traders learn a few technical
indicators and expect to make money. Day trading is not just about
having trading indicators. It's about having an understanding of
how the market really functions and what is needed to make money
in it.
The
focus of a day trading business is on the actual trading with good
money and risk management and a simple practical trading strategy
with high probabilities of success.
Day trading is not for everyone. It requires
discipline and sound trading skills. The profit potential makes
it attractive to many traders wanting to develop a trading business.
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