Day trading or Intraday is a type of trading characterized by a period limited to a single trading session.
MPW suggests Day Trading only to achieve a higher goal: the potential generation of resources to be set aside for future purposes. With this in mind, it adopts Day Trading to exclude the risks associated with the night and the interval between two different trading sessions. MPW does not consider leveraged transactions.
Again to contain risks, it focuses on the New York Stock Exchange, considered the most liquid and reliable. MPW’s tactic consists of suggesting only 2 operational moments, 15 minutes after the Stock Exchange’s opening and 30 minutes before it closes.
Consequently, in addition to skipping the phase for finding the securities on which to invest, it minimizes the time to devote to operations or reduces it to zero if you prefer to automate by connecting the MPW daily bundles directly to the broker the subscriber has chosen. (MPW is not a broker nor a trading platform).
Since the MPW objective is to suggest the conditions for the multi-year continuity of a flow of even small resources to be set aside, the risks and time to devote aspect are fundamental, pointing to zero.
This is the reason for MPW’s instrumental choice of intraday. To enrich the subscriber’s knowledge of the trading world, below we highlight the most relevant aspects of this trading method, which is enjoying increasing success.
Recall that we can read that over 80% of users are losing money on all the trading platforms. This testifies that trading requires ample time, competence, vision, experience, know-how: it is a demanding profession. Anyone who does not interpret it as such is bound to have significant damage.
MPW uses trading as a tool, keeping the external subscriber conceptually from that context. The recommendation to the subscriber is to continue to remain external and not be tempted by easy earnings, which are only traps for a non-expert. This will also save him from the many scams that are on the web.
Outside of MPW, Day Trading, when chosen as the operating mode, requires great skill and time. We report, below, the prevailing characteristics.
What it means to trade intraday
Trading online means taking advantage of the price fluctuations that occur in the same session. It is a way of operating in the short term, which consists of investing and disinvesting, buying, and reselling the stock during the same day, in a few hours. The interest lies in exploiting the short-term fluctuations of the stock markets.
The day trader is deliberately looking for stocks that are very liquid and as volatile as possible. For example, it uses the advantage of so-called “momentum stocks”, which have a solid dynamic due to news or other events and can make large intra-day movements. In most cases, strong price movements are driven by news.
No risk of gap
Gap risk is the risk that a stock’s price will fall dramatically from one trade to the next. A gap occurs when a security’s price changes from one level to another without trading in between, often due to news or events that occur while markets are closed.
The biggest advantage of day trading is probably the absence of surprises during the night. The trader cannot be surprised by the price gaps that occur from day to day. This allows full risk control for the traded position.
Especially in the phases where the markets are nervous and volatile, which can be observed from time to time, especially in the bearish phases of the market, these risks can be managed reliably, a great advantage for every trader.
Independence from the global market
The performance of the financial markets has virtually no role in this area, and it is usually possible to act independently of the general situation. The direction (long or short) also plays no role and can be freely chosen. Very short-term trends and sectoral rotations can be exploited in an ideal way. As a trader, maximum flexibility and ability to react to market changes is possible.
The market phases positively influence the portfolio, as volatility and strong price fluctuations are almost on the agenda. And a day trader can take advantage of it.
Where there are advantages, there are also disadvantages, notably higher costs when a large number of trades are made. For this reason, the broker’s cost structure is an important decision criterion when choosing a broker for its commissions as well.
No exploitation of strong trends
The day trader cannot participate in medium to long-term trends because it focuses on so-called “breakouts” and short-term intraday movements. This is a characteristic factor of day trading.
There is a clear disadvantage to day trading on American stock exchanges. A minimum capital of $ 25,000 is required for trading. Specifically, this is the net liquidation value of all positions and available cash. Below this limit, the foreign exchange supervisory authority allows only three intraday transactions in five working days.
If more positions are traded during this period, the broker must temporarily close the account. A valid option as a way out for traders with small accounts is trading in equity CFDs or leverage certificates, as these products do not fall under the day trading pattern rule (PDT rule). Check with the broker of your choice regarding the leverage offered when trading this asset class.
Determining time factor for those who work
Day trading is difficult to implement for workers, as intraday trading, depending on individual orientation, usually requires fixed trading hours that are not always compatible with work commitments. However, the day trader does not have to trade every day and choose the days he wants to trade.
Who can trade
Those who have the characteristics to open an account with a broker: theoretically all. In reality, it is good that only those who have the appropriate professional profile do it. You need skills, experience, know-how that are not acquired in a few hours, with a course, but in years of hard work, also considering the inevitable failures. Those who believe that a course of a few hours is enough are bound to have substantial losses.
While every effort we made to ensure the accuracy of this information may not be complete or current. This information may be subject to change at any time.