Is Day Trading a safer bet for the beginners?
Trading is of many types. Day trading or intraday trading is a popular trading option which many traders opt for. It involves buying and selling stocks and shares or commodities on the same day itself. For instance, if a trader is buying 100 shares of a company on a fine morning, he sells the shares by the end of the day, making zero to a little profit, depending on their stock value. Next day, the trader again starts from scratch.
A number of things can be traded:
Day trading is a spectacular platform for aspiring traders and the experts too. The following can be comfortably traded in a day.
- Foreign currency: Day trading can be performed in the most popular and profitable Forex market.
- Cryptocurrencies: Of late, the surge in the value of Bitcoins and Ethereum lures a lot of investors. These digital currencies can be traded on a daily basis with the aid of supporting tools like Bitcoin Code.
- Commodities: A wide variety of commodities like Oil, natural gas, gold, petrol, and many others can be day traded. The commodity market has high liquidity.
- Stocks: Physical stocks, penny stocks, and shares of private banks and MNCs can be day traded in the best possible way.
Setting up an individual trading account is a vital part of trading. The traders can choose between two different account types:
- Cash account: It involves making a little investment, that is keeping some in the wallet and performing trade within that stipulated money. This is extremely safe as there is nothing to lose more than the capital.
- Margin account: It involves borrowing money from brokers and using the same to purchase shares or commodities. The probability of potential loss is huge here as the brokers insist the return of a larger sum, in case of adverse trade.
How does it suit the beginners?
It is quite natural for the amateurs and newbies to get overwhelmed when exposed to thousands of trading possibilities and the lucrative returns they offer. But it’s wise to start from basic. The susceptibility to risks is huge. To start with a little investment is the safer bet. This generation has been blessed with a number of books, academic courses, and apps which gives an outlook about the diverse trading options and strategies. One can make use of them before jumping in.