When it comes to trading, every single person comes to a point when he has to choose an approach for placing money into the market. At first, the question is how much time could be shared for trading itself, pre-market analysis, trading activity overview, and other important aspects.
Trading styles like scalping require a lot of time and could be fairly considered as a job for which you share the biggest part of your day. Investing is an opposite approach when you share way less time for the trading routine though you get way less income if compared to other trading styles. If you want to choose something average with decent potential gains and little time in front of the monitor then day trading is the best approach to stick with.
What is day trading?
Day trading is a practice of buying and selling an asset within one trading day that occurs on forex or stock markets. Day traders normally use high leverage and try to get income out of directional small price movements.
These movements usually occur due to scheduled announcements like economic statistics, corporate earnings in the case of stocks, or interest rates in the case of currencies. Markets aggressively move when some outstanding news is out and expectations for this news have not been met. It is a common practiсe that sudden, significant moves lead to big profits for day traders.
Overall, the concept of day trading has increased in terms of popularity over the last 10 years. One of the main reasons is technological progress– fast broadband, PC in every family, and mobile phones with access to the internet that allows getting all the market information at fingertips. This has become a rationale for more people being involved in the forex, stocks, and other markets with a day trading approach.
Choosing a broker
When day trading is chosen as a trading style, a broker that executes the trades on the market should be chosen. Please have a look at our brokers reviews to get complex overviews about the brokerage companies that offer its services. Choosing a broker is an important decision so here are some key points to look at:
- Regulation– It is a must thing to be sure that a broker is regulated. A regulated broker is legally obliged to protect the client’s financial interests and there might be even some funds protection.
- Trading costs – This factor is usually underestimated and in reality fees and commission might be a point that diverse losing strategy from a profitable one. Active day traders should always tend to minimize these trading costs.
- Trading Platforms – There must be several platforms available that will allow selecting the most suitable one in terms of usability, built-in functions, and other features.
- Instruments and Markets – A trader may want to trade different assets depending on his strategy. Not many brokers offer the full set of asset classes like forex, commodities, metals, energies, CFD stocks, indices, and others.
- Execution – High number of trades requires good execution quality because you need to get the best price you without any slippage.
- Support Service – Every trader needs assistance at some point when using the services of a broker so companies with fast response times should be chosen.