Day Trading - What is the Key to Successful Day Trading? Part 1

In order to be successful as a day trader, and Internet daytrading more precisely, you have to have a knowledge of how the system works. In order to find out how the stock market is regulated, we have to look no further than Wall Street for the answers.

Wall Street has been trading, and making billions of dollars for the better part of 100 years, they know their stuff. Just take a walk down Wall Street and you will see huge billion-dollar brokerage firms, banks at every step and trading firms as far as the eyes can see.

But the question that we need to find out is how they make so much money? What is it that they know that we don't? And how do they go about generating billions of dollars every year trading stocks? Stocks are nothing more than promissory notes often time represented as zeros and ones on a computer system. So they are making billions trading zeros and ones on a computer screen? Well there is more to it than that.

As a day trader it is important to know where the money comes from, and where it goes, and how to profit from this information of electronic money passing from one person to another. This is important because to a less degree, the day trader will be doing the exact same thing to make a profit. So understanding of how the system works would be the first step in capitalizing on the billions in profit that passes from one hand to another. All we are asking for is a few measly fraction of a percent of this huge volume of money, not too much to ask is it?

Once you have a good handle as to how Wall Street works it is then and only then that you can start to put together a targeted strategy that you will use in your daily trades. Like any endeavor, before you take one step forward you must know what the pitfalls are, where they are located, and how to void them, all at the same time while making a profit.

Once you have an idea as to the inner works of the stock market, things like the bid ask spread will begin to make sense and will lay the foundation for differentiating between trading the New York Stock Exchange (NYSE) and the National Association of Securities Dealers Automated Quotation or the (NASDAQ) now the Financial Industry Regulatory Authority (FINRA), but that's another story.

Like anything else knowledge is power and power can make you money. Once you have developed your knowledge as to how the system works then it will be easy to determine how to use the system to your advantage. But just be conservative with your trades at first, because there are power brokers out there that eat day traders for breakfast.

The most important key I believe to have successful trades is to have a good risk management plan and to not let emotions keep you from sticking to your plan.

Tim Nelson has been writing articles showing people how to trade successfully online for over 8 years. His latest sites Trundle Bed Frame and Trundle Beds For Kids are not exactly about trading, but it is a helpful resource if you have kids in your life. A Healthy Kid Is A Well Rested Kid.

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