Friday, May 31, 2013

3 Things to Consider Before Becoming a Day Trader

Parents like us explore everything to earn money for our family and children's future. I am no different because as you all know I am into a small business already and given a chance I will also explore more better ways to earn like trading. If you are also considering trading to earn more for your family, then read through and this might help you.

Many professionals envy the freedom and autonomy day traders experience in their daily work routine. Though the life of a trader can seem glamorous and profitable, in reality, the risks are high and a very small percentage of day traders actually see earnings over time. If you’re thinking about investing for a living, there is noting wrong with that, but take some time to consider what that means as a career move and put serious time and thought into the decision before making a shift to full-time day trading.

Read on for three things to consider before diving headfirst into the frantic, oftentimes stressful lifestyle of a trader.

Do you have the proper training?
Simply having knowledge of the financial markets is not going to lead to major gains. You need to be familiar with the art of analyzing the ups and downs of the market and understand how to use the existing software to further your cause. It takes a fair amount of practicing with fake funds before anyone will come out on top.

Additionally, consider taking a course to brush up on fundamentals. There are online programs as well as in-person tutorials with companies like Online Trading Academy that can help mold you into the most successful trader you can be.

Do you have the character?
Trading is mentally draining and physically exhausting. You sit at a desk for many hours at a time squinting at a computer screen (or two, or ten!) and a single slip-up can undo weeks of hard work. Traders must have extreme focus and discipline. If you are easily distracted, trading is probably not a good career path for you. In this same vein, highly emotional individuals are not suited for this line of work. A great trader is able to distance him or herself from the emotional component of the work in order to wisely manage wealth and grow funds over time.

Do you have the capital?
Many beginner traders find themselves in serious debt because they assumed they would profit far sooner in the process. Though trading can be lucrative and offer big pay-offs for those with experience, there is always an element of risk involved. In fact, some even say that trading is akin to gambling in some respects.

The best traders have considerable resources to begin with. Even those traders working at multinational financial corporations – with the best analytical software and data at their disposal – can still experience losses. These financial professionals just don’t have the same personal consequences as those traders who are out on their own, independent of an umbrella company, trying to earn an income to support their families. Make sure before you get started that you have a sizeable nest egg to fall back on. If you don’t have the funds to lose, you shouldn’t be trading at all.

If you have thought through these considerations and still believe trading is the right path for you, congratulations. There will likely be some days of unfortunate losses, but with the right technology, attitude, and market research, you will hopefully be able to turn losses around and accumulate significant earnings over time. 
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