DAY TRADING COURSE - gigapedia.org

DAY TRADING COURSE

HAGERTY

TRA DINGMA RKETS.COM Members. Welcome to l\o1y fin-Wf'ek Day Trading Course

In thi s first week of our five-week course on day trading, we want to defin e what the business ofday

trading is and what it is not. We will d iscuss the differences between professional d irect-acc ess day traders, and

those traders attempting to accomplish the same th ing through on-line brokerage finns with internet ISP hook ups.

The SEC has expressed many conce rns regardi ng the expl osive growt h of on-line day tra di ng, and

we will address thei r concerns in th is first installment of the course. We will explain why day trading is potentially

a valid and rewarding business, but at the same time, we will make you acutely aware of the various hurd les you

must overcome 10 succeed.

Successful day traders must maintain a proper psychology, mental attitude, and focus. In addition.

you must work with super ior technology, ha ve sound money management strateg ies, and develop a thorough

knowledge of the markets. Ofmost importance. joe must understand the risks involved in trading stocks. I realizetha t th is information may be dry, but it is essen tial that you have th is base of understanding before proceed ing.

1 Day Trading Ikfinw

The professiona l day trad er is a person who trades stoc ks in the office of a registered broker dealer .

With the ri ght amount of tr ainin g, exper ience and communications, some of these trad ers will eventua lly trade

remote from their homes.

Registered broker dealer firms provide the di rect access communications (T-I lines) and electronic

execution equipment/software that puts these traders the same execut ion access level as the Merrill Lynch's and

Goldman Sac hs's of the world. Th e software used for execution and mon itorin g the market s is often far more

advanced than what I've seen or used on major brokerage firms trading desk s. Day traders th at work in thi s

s ituation can compete on an execution bas is with the NASD market maker s and other electron ic systems or ECN· s.

Oay tradin g by definition means that you end eac h day l1al , mean ing you go home without any open

posit ions at the end of the Iradi ng sess ion. Day trading is not takin g home 500 shares of NEON al 44 on July 6,

1999 (see number I on cha rt) and watching it open on July 7, 1999 at 18 3/8 (see number 2 on Chart). As youmay

recall, New Era of Networks, Inc. (NEON) announ ced a large earnings short fall after the close on July 6, 1999. 1

use NEON as an example of the problem s you can face by not end ing eac h day flat