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It’s currently day 27 of waking up to the same exact routine of being home and pacing around the house looking for something to do. Since we’ve been in a state of inertness, I’ve been able to learn more and more each day. One of the most intriguing things I’ve learned since being stuck on the couch, has been day-trading.
What is Day Trading? Day Trading is known as the art of buying and selling equities or stocks in a short time usually a day. The goal is to earn a small profit on every trade.
Each day I’ve been able to profit at least $80 to $100 day trading stocks that are affordable and I know well. Day trading can be risky but only if you’re trading money that isn’t yours, it’s not as if we work on Wall Street and make tons of money. So let’s be realistic, trade with an amount that your comfortable with. Not with an outrageous amount, an amount that if you lost it you would go crying to your mommy about it… I tend to use only about $30-$70 of my own money buying call options, it’s always best to buy in the money. Meaning your break even percentage is extremely low so it doesn’t take a long time to profit. You simply buy a call option only if you believe that the stock is going to rise. I typically buy 1 contract every trade. If you don’t know what a contract (click the link above for a full description). A contract is 100 shares of a single stock. If you buy 2 contracts your purchasing 100 shares of a stock, so be mindful of what stocks you choose. The market may go down rather quick, and your portfolio could drop to zero. This is where cancelling your contract comes into play. You are able to cancel at any given time, so if you feel like you’ve made a bad move, Exit the contract. Timing is always key, buy at the right moment and you may make yourself quite a pretty penny.
Buy the dip, and exit quick. The best time to buy an equity, is when its hitting its bottom or the dip. Stocks are known for quick jumps up after being in the red, this is the best time to buy in. Once your in the money, or making your profit you’re able to cancel your trade at any time. I try not to play around and wait to get the most gains possible, that would be a buy and hold strategy, with options you want to get in and get out. Make your money, exit, and repeat. You can easily compound your money this way, just remember keep your trades reasonable by spending what you can afford to lose. A book that i suggest for you to read is How to trade options: A complete guide for beginners. This will guide if you have any unanswered questions, also feel free to ask away down below in the comment section.
After much practice you can find a stock that your profitable with and continue to trade it over and over. The stock that has been my winning stock has been MFA, a real estate investment stock that is at its 52 week low, and with recent good news it has been ticking up slowly. Who knows perhaps after a few days trading this may take over your mornings and start day trading for a living. It never hurts to have more than one streams of income!