Day-Trading
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Day trading refers to the practice of buying and selling financial instruments such as stocks, bonds, currencies, futures, options, and commodities, during the day with the aim of making profit from the volatility on the market. Day traders may deal with thousands of shares in a single day, often with leverage, and seek small-percentage profits from their trades. A trader takes a specific position depending on their analysis of a stock’s probable price direction within the trading period.

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In order to succeed in day trading, you are expected to be knowledgeable, disciplined, and patient to wait for the right trade.

There is a difference between day traders and investors in that day traders hold their securities for only one day. Day traders close out their positions at the end of the day and then start over again the next day. Conversely, swing traders hold their securities for a couple of days, sometimes it can be even months, while investors may hold their securities for several years.
Originally, day trading was done by financial companies only as they had access to the exchanges and market data. But with the swift advancement of technology, today individual traders can directly access to the same exchanges and market data, and can make the same trades at very low cost.

What are some of the benefits of day trading?

The major advantage of day trading is the potential to earn huge profits. There are many other benefits you can reap from day trading if you can effectively manage your emotions and cope with the inherent pressures.

Be your own boss

A day trader is simply self-employed, working by themselves and answerable to no one. Being professional day trader means you are a true entrepreneur living by your wits to reap the benefits of your own decisions.

Day-Trading

Expensive education is not a requirement in day trading

Unlike jobs in the corporate market, day trading doesn’t require an expensive education. Basically, there are no formal educational requirements for becoming a day trader.
Another good thing about day trading is that you can do it from anywhere provided you have access to a computer and a reliable internet connection.

Day trading requirements

Knowledge

Knowledge and experience in the marketplace is essential for one to succeed in the stock market. The latest stock market news and events that affect stocks will help you reap huge profits. Attempting to day trade without an understanding of the market fundamentals is a ticket to losing your money.

Sufficient Capital

A substantial amount of capital is required to capitalize effectively on intra-day price movements.

Infrastructure

A modern day trader must rely on a combination of computers, routers, internet connection, and specialized software in order to keep track of the market all day round. Besides, an active day trader needs to use an electronic communication network to avoid paying a commission to a broker for each trade.

Discipline

A profitable strategy may not yield good results if you are not disciplined. Many traders end up losing their hard earned money because they fail to stick to their trading plan. Therefore, you need to develop a set of strict rules that take the emotion out of a trade.

Day trading is very prevalent especially in this digital era. Day trading, both institutional and individual, play a vital role in the marketplace by keeping the markets efficient and liquid. Day trading takes time to master. With proper techniques and guidelines, one can make huge profit from day trading.

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What is a stock broker?

According to the Business Dictionary, a stock broker is a licensed individual or body with the following qualifications. He or she has passed a certain test and is certified to offer investment advice. He can counsel customers on if to hold or sell securities. He or she can execute the selling or buying of investment orders by his or her clients. He or she also charges a percentage of the transaction to cover his or her fee (Downes, J., & Goodman, J. 2014).looking-at-the-statistics-of-stock-exchange

Qualifications and Licensing of stock brokers

You can become a stock broker with as little as a high school diploma in a business related field. This is, however, a field where once qualification and past successes dictate one’s future. Bearing this in mind, having extra qualifications is an added advantage. These extra qualifications can come in form of, a bachelor’s degree. According to the Bureau of Labor Statistics, a bachelor’s degree is the least requirement for a career as an entry-level stock broker. The common stock broker degrees include economics, finance business, and accounting. For you to work in an investment firm or bank a bachelor’s degree is also mandatory (Bodie, Z. 2013). There is, however, no specific majoring needed but one in a business related field is recommended. Extra classes in statistics or mathematics can allow you to stand out among a pool of stock brokerage candidates.

Duties of a stock broker

Similar to other occupations stock brokers have duties and responsibilities. Among these duties include the duty of fair dealing. The security industry demands fair dealing from all of its employees. Fairness and honesty must be exercised in all the dealings with customers. There are even bodies like the Financial Industry Regulatory Authority (FINRA), put in place to ensure that these virtues are practiced. These bodies also ensure that these laws are legally enforceable.

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Stock brokers are also expected to be loyal. Due to the fact that stock brokers earn their money through a commission, there is a chance of a conflict of interest to take place. Stock brokers can focus on their interests and increase their own income or focus on the customer’s needs and increase their interests. Duty and loyalty ensure that the needs of the customers are always put first.

As a stock broker, you are expected to disclose all the relevant information to an investment to your customers. For a customer to make a decision that is most profitable, he or she needs reliable information (Prentice, R. A. 2011). Stock brokers are expected to provide their customers with this information regardless of their other investments or possible personal loss. Brokers are also obligated to inform their customers of any risks that may affect their investments. No stock broker should perform any activity in the customer’s account without their approval. The only way a broker can do this is if the customer has given a broker power of attorney to make trading decisions.

Conclusion

In conclusion, a stock broker is anyone or anybody that is licensed to offer financial investment advice. To become a stock broker is possible with as little as a high school Diploma. Additional qualifications in a business related field are an added advantage. Among the duties of any stock, broker includes loyalty to their customer, fair dealing in their operations, a full disclosure of information to their clients and fair.

References
Bodie, Z. (2013). Investments. McGraw-Hill.
Prentice, R. A. (2011). Moral Equilibrium: Stock Brokers and the Limits of Disclosure. Wis. L. Rev., 1059.
Downes, J., & Goodman, J. (2014). Dictionary of finance and investment terms. Barron’s educational series.

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Support-and-Resistance-in-the-Stock-Market
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Support and resistance have long been vital trading indicators. With their roots in the supply and demand theory, these concepts represent key junctures where the forces of demand and supply meet.

Support and resistance are undoubtedly the most important attributes of technical analysis. Usually, they are used by traders to refer to price levels on charts which might act as barriers which control the movement of the price of a stock or a security. They are the levels from where the movement of this price tends to stop or reverse back. They represent the levels where quite a few traders might be willing to buy or sell the stock on various platforms.Support-and-Resistance-in-the-Stock-Market

What is support?

Support is defined as the price level at which demand is thought to be strong enough to prevent the stock price from falling any further. Whenever the price reaches the support level, it has difficulty going past that level. The logic dictates that as the price declines and approaches support, buyers become more inclined to buy a sellers become less willing to sell. By the time the price reaches the support level, demand will tend to overcome supply and stop the price from falling below support.

What is resistance?

Resistance is the opposite of support. It is the price level at which supply is strong enough to prevent the stock from increasing any further. The rationale is that as the price approaches resistance, sellers (supply) becomes more inclined to sell and buyers (demand) become less inclined to buy. By the time the price reaches the resistance level, the supply will overcome demand and prevent the price from rising above resistance.

Support and resistance levels are important points in time where the forces of supply and demand meet. These support and resistance levels are seen by technical analysts as crucial when determining market psychology, supply and demand. When these support or resistance levels are broken, the supply and demand forces that created these levels are assumed to have moved, in which case new levels of support and resistance will likely be established.Support-and-Resistance-in-the-Stock-Market

Some characteristics of support and resistance figures:

  • They help stock traders to arrive at entry or exit prices.
  • They are a useful aspect of trends as they help traders to make trading decisions and identify when the trend starts to reverse.
  • Round numbers are important in support and resistance levels. The increased selling and buying pressure at round numbers lends them psychological importance.

The importance of support and resistance

Support and resistance is a crucial part of trends as it can be used to make trading decisions and identify when a trend is reversing. Besides, these barriers form the basis of many successful trading strategies an almost all market stocks, bonds, forex, options, futures, commodities, and many more.

Moreover, support and resistance are determinant forces in the market. They represent price levels where traders can make financial decisions about profit and loss.

Identifying support and resistance

There are many indicators that have been developed to help identify these two barriers. However, using them effectively takes some practice and experience. Support and resistance can be easily identified with the help of moving averages. Besides, the Fibonacci retracement tool can be used to determine these levels.
Generally, support and resistance play an important role in technical analysis. Furthermore, they are key tools used by research firms, stock advisories, and broking firms which provide stock tips based on their technical analysis.

 

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