Online Forex day trading strategy & software

'Day Trader' - A person whose goal is to make his or her profits from a security in the shortest amount of time - preferably during a single day.

In day trading and/or short-term investing, you are pitting your wits against every other person in the market. Every pound you make is on the back of someone else's losses. Your goal is to profit from your investments and trading and that requires someone else to lose - try to make sure it's not you. Never forget that and you'll be off to a much better start in the markets.

In the following text we will try to impart some of the knowledge we have acquired while day trading for a living. While these are not always hard and fast rules that can be applied to every situation, we do feel that they are helpful and represent a good starting point.

Day Trading Strategies

How much capital do I need?
This is a very common question and one we receive quite often. By the same token, it's also somewhat difficult to answer. How much do you really need in order to start day trading? How big a "stake" (a term used to refer to your starting capital) is required to get going?

The only answer is that it's different for each person and it's something you must consider for yourself before you start. However, generally speaking, you should have enough trading capital to purchase between 500 to 1000 shares of any given stock. Ideally, without having to use margin.

If you are in the habit of trading £20 to £40 priced stocks, you may need as much as £50,000 to start. At the same time, one can trade with as little as £5,000 to get started. It also doesn't hurt to have enough capital to diversify into several different positions (two to five generally) at one time. Just remember, if you are starting small, keep your expectations realistic. Certainly, someone trading with£5,000 to £10,000 is going to have a much more difficult time generating £500 per day than someone using £50,000 or more. As long as you keep this in perspective, it will help keep you grounded as you begin learning.

When you get into the bigger leagues of day trading, then it's nice to be able to "step on" (i.e. purchase or short) a "block" or two of stock. This would be generally defined as 10,000 shares of stock. This typically is going to require £250,000 or more of trading capital, plus some use of margin in limited situations and for a limited time. When you reach this level, it's easy to see how day trading can become quite profitable (and quite risky!). A few points (or even a few fractions) across 10,000 shares can return quite a bit of money quite rapidly. Just remember it goes both ways; you can quickly lose quite a bit as well.

There's no right or wrong answer with regard to how much you need to start. Simply keep your objectives in perspective and reasonable. This will go a long way to giving you a good start in the markets. Also understand that if you are starting small, factoring in things such as equipment fees and transaction costs may become much more important.

Please call us on 020 7 398 2555 for more details about opening up an online Forex day trading account with Blue Index.