Whether you invest in the stock market or you’ve been thinking about investing in the stock market, you’ve probably heard the term day trading before. Everyone talks about it, but not many people know exactly what it might mean. Day trading continues to grow in popularity over the years and that’s because a lot of money can be made if you know what you’re doing. It’s much more than just getting stock alerts and buying into the market when it’s low. There are formulas that day traders used to make a lot of money—quickly. Read on to find out what day trading is and why it’s so popular.
What is day trading?
Day trading is the process of buying into the stock market, typically when stock prices are low, and welling your stocks quickly for a profit. This can be done with almost any stock and typically traders focus on stocks with a lot of volume. High volume means that a lot of people are trading a specific stock. This means that the stock will have more movement up and down. The stock market opens at 9:30 a.m. every weekday and this is when most trades happen and the volume is the highest.
Typically, most day traders focus on buying stocks when they’re low and selling them when the price goes up. They rely on the factor that the stocks could rise quickly and if they put enough money into a stock when it’s low, they can make hundreds or thousands of dollars in minutes. This is how day traders make a lot of money in minutes and can quit their jobs to start trading full-time. Day traders also use different strategies and formulas to start trading and make money. If they see a trigger about a stock possibly going up or down, they will make their trades accordingly and try to capitalize on it.
Why is day trading so popular?
One of the main reasons day trading is so popular is because you don’t have to leave your home to make trades in the market. You can trade right from your computer at home and not have to worry about a commute, a boss, or co-workers. This elimination of an actual job is why so many people are attracted to day trading. You can make your living in just a few hours at your computer every single day.
Another reason why day trading is so popular is that it’s all about research. The more research traders do in the market, the better they will perform. For example, if you know a lot about the retail industry, you might be better able to day trade those stocks compared to other stocks that you don’t know as much about. Learning about the stock market, triggers and volume amounts will help you learn more money as a day trader because you will be better able to predict what is coming next. This is why day trading has been so popular, people like the challenge of learning the market especially when there is money on the line. Traders like the ability to expand their money just by learning about the market and executing their strategies. More and more people in today’s society don’t desire to go to work and don’t desire to have a boss and turn to day trading to make their fortunes in the market.
How does day trading compare to regular stock investing?
Compared to regular stock investing, day trading is much quicker and profits are made almost instantly. Typical stock investing is made for people who want to invest for the long run. They invest for years and years into the market and then use that money to retire with, sometimes retiring early. Day trading is something that people use to replace their full-time job by making money every single day. Instead of putting their money into stocks and waiting years to get their return, they are profiting on it almost immediately and then living on that money. According to The New York Times, many investors and gamblers love day trading because it’s exciting and there is good money to be made if you know what you’re doing.