Day Trading

Day trading is buying and selling stocks on the stock market in one day including  pre-market and post-market. It is used as an investment and has become quite popular since the high tech age began in the late '90's. This is because there are many online companies and with the correct internet connection (DSL) and software you are able to get the direction of the market and buy and sell as an individual. In addition, these days there are courses available online for both stock market day trading and forex (foreign exchange) trading and investing.

Restrictions Before the computer age buying stocks were done for long term periods, and stock was only sold if the companies were in a bad condition. Day trading didn't begin until quite recently when it was possible for a person to do a lot easier. It was then that both individual and institutional traders began. Institutional traders worked in large companies and used the capitol, and computers and software that belonged to the company. Then as the home internet began to be popular individuals began to do it on their own or as a means to manage other people's money.

Then in 2001, the Wall Street officials began to see that there could be major problems if the average Joe began to do it improperly and lost all of his money. So they set up a series of laws to protect people from becoming patter day traders using the stock market. The main part of this law was to put a $25,000 minimum (cash or stocks) requirement in addition to a limit of 4 trades in 5 days. It is wise for beginners to be able trade in the stock market; however it is also wise to spend time after you reach your limit to watch how it really works. They also added a penalty of 90 days without being able to day trade stocks.

It also must be noted that this is the only restriction. Anybody can trade stocks overnight, or up to 4 trades in 5 days. Also this restriction only applies to the stock market. As of now it does not apply to the foreign exchange market or any other market.

Day trading cautions There are many online day trading companies that are available now that many people have the internet and working at home is popular. There are scams to be on the lookout for. Any company that doesn't seem like it is willing to follow the restrictions. In addition there are many courses on day trading available online, these can cost hundreds of dollars and you can not always be sure of what you are going to get.

So, if you plan to do day trading online, be sure to learn as much as you can. If possible to take a course that is not online, get books and create a strategy or a plan of your own and stick to it. Soon you too will be day trading online.

Day Trading | Partners |