There is money to be made in the stock market. We all know this. And subsequently, a few Americans embark on the idea of filling their coffers from day trading. But before you begin this endeavor, read these facts first.
The simple truth is that the majority of people who day trade lose money. According to the North American Securities Administrators Association, only 11.5 percent of those ever trade profitably. Included in that number is the fact that 95 percent will fail within the first two years.
However, if you are still curious about investing in day trading, follow these three steps to help you get started.
1. Invest in a solid trading computer setup.
Day trading involves long hours spent behind a trading computer. As such, you would be best served by buying the best computer for stock trading. A computer that you exclusively use for day trading should also be equipped with software stock trading, as well as one that has the hardware to meet the rigor and demands of the job. Another caveat is to consider a system that is easy to set up. Many traders also find it beneficial to employ a multiple monitor trading computer so that several transactions can be occurring simultaneously.
2. Spend a little money on speed.
Given that the nature of day trading means that most traders hold onto a stock or investment for no longer than a few hours, means that the speed of the hard drive of your trading computer setup is imperative. On an average day, a day trader can place many buy and sell orders (some trades can last anywhere from minutes to mere seconds). Having a powerful trading computer setup that can stay up to speed (as well as a trusty internet connection that has reliable access to real time market data) could spell the difference between a profit or loss. When considering the best PC for stock trading, be sure your trading computer setup includes a high speed processor, tons of RAM, and reliable storage.
3. Have a backup plan.
The absolute worst thing that can happen in the midst of a day trade is for your trading computer setup to go awry. But, it can happen. That is why it is important to have a backup computer (desktop or laptop trading computer), already installed with the software, so that precious time is not lost in the event of a system failure.
Day trading can be an expensive and risky investment. But if you follow these trading computer setup steps, you might be able to increase your chances of earning a little extra coin. Good references here.