How You Would Profit As a Day Trader

How You Would Profit As a Day Trader

Submitted by adil on Fri, 10/10/2014 - 17:30

Here's How You Can Profit as a Day Trader

Predicting the market timing is a strategy, which is opted by a number of professional investors for buying or selling of shares. This strategy also has a number of controversies linked to it. Listed below are a number of factors which you should consider before making money as a day trader.

Contradicting opinions of Investors
The concept of efficient market theory needs to be understood before making any judgment about day trading. The main idea of this theory is based on the fact that at the given time, the prices offered should be able to completely reveal all the information about a particular share or stock, indicating that no potential investor has an edge over the other investors to predict the future stock prices. This is the belief which pertains at the academic level of market timing strategy.
Some investors are also of the view that, outside the scope of academia, market timing is only engrossed on individual day trading and other disgraceful actions for mutual fund trading by stakeholders. Some of the investors refuse to consider this strategy as credible. Trading on daily basis is one of the least advisable methods for earning money, as recommended by a number of renowned stakeholders.

Legitimacy and Morality Issue:

Although the concept of Market timing strategy to predict the direction of future market movement is not illegal or unethical but due to the uncertainty that it entails, this method has become highly controversial. The aim of every potential investor is to generate as much as possible profit. They are in striving of opportunity to sell the shares at a higher price and buy at the minimum cost. The glitches in market timing strategy arose as most of the mutual fund companies halted short term trading completely, when they chalked down the rules for mutual fund trading. Only a few special clients were allowed to use this strategy. This clearly explains that nothing is wrong with the market timing strategy, but its implementation has made this strategy controversial and unethical.

Opinion of experts :
From an economic point of view it is strongly acclaimed fact the investment decisions which involve extended periods of time and are based on buy-and-hold strategy are able to generate larger revenues. If the investors show patience and analyze the timing of the market, they will not only gain profit but also earn respect among the market traders.

Analysis of Market trends:
The decision to choose market timing depends on the strategy of every investor. But experiences shareholders recommend analyzing the market trends over a considerable period of time, where they are able to access the market shifts. The financial estimations and critical risks should be monitored very closely in order to attain maximum profits.  Even if you decide not to try your luck at market timing, you should avoid a submissive approach for investing your money.  Experienced investors suggest that managing your money actively is not the same as market timing. Make sure to analyze the market trends and investment process should always be active one, where you should try to access the best possible outcomes.