July 19: Become A Day Trader – What Should You Trade – Part 7

Welcome back to the 7th part of the Ultimate Trading Systems article series. In this lesson, we`re going to discuss: How to become a day trader – What should you trade?

With a few portfolio objectives defined, your next step is to decide what market you are going to trade in order to reach your portfolio objectives. You want to take this step seriously, because this will help you become a day trader – (and a successful one at that).

To become a day trader, select the most appropriate market. I suggest you pick a market you are familiar with or one in which you would ultimately like to trade. There is no right or wrong answer in reference to this step on how to become a day trader, because, there is no “best” performing market…

The important decision when you become a day trader is to select one market. Avoid the tendency to want to trade everything and realize that there are enough potential profits by trading just one market. Many traders who want to become a day trader, fall into the trap of thinking the more markets they trade, the more money they will make. Unfortunately, this could not be further from the truth.

When you become a day trader, the real money is made by mastering your chosen market and understanding it is not the selection of the market that makes the money. I personally am less concerned about the markets I trade, and the securities I choose within those markets, than I am with the plan I am entering those specific markets with (but more on this later).

To become a day trader, you can successfully trade any of the markets I have outlined below… just be sure to choose only one:

1. BECOME A DAY TRADER IN STOCKS

Plain and simple, stocks are a share in the ownership of a company. Stocks trade on a stock exchange, which is basically a venue to buy or sell a stock. In this arena, big players such as Warren Buffet and Merrill Lynch dominate the market. That said, dont be scared off because, if youre new to trading, this is probably the best place to start.

2. BECOME A DAY TRADER IN OPTIONS

Options are a leveraged instrument that derives its price from an underlying security (stocks for example). They give the buyer of the options contract the right, but not the obligation, to buy or sell an underlying asset at a specific price on or before a certain date.

So, unlike a stock, which represents equity in a company and can be held for a long time, if not indefinitely, options contracts have finite lives.

Basically options are the next step up from stocks in their complexity. They introduce the opportunity to leverage your money and increase profits.
3. BECOME A DAY TRADER IN COMMODITIES

Without going into too much detail, commodities trading involves the trade of raw materials. Such as grains, livestock, precious metals, energy, etc.

Commodities trading can be a great stepping stone for trading more advanced markets.

4. BECOME A DAY TRADER IN FUTURES

In a similar vein to options, futures contracts also have finite lives. They are primarily used for hedging commodity price fluctuation risks; or for taking advantage of price movements, rather than for buying or selling the actual cash commodity.
The buyer of the futures contract agrees on a fixed purchase price to buy the underlying commodity (wheat, gold or T-bills, etc.) from the seller at the expiration of the contract. This differs from options, where the buyer has the right to purchase the underlying commodity, but is not obligated to do so.

As time passes, the contract’s price changes relative to the fixed price at which the trade was initiated. This creates profits or losses for the trader.
Futures trading is one of the more complex forms of trading, but along with the increase in the skill level required, there are greater rewards (in terms of return on investment (ROI).

5. BECOME A DAY TRADER IN FOREX

Forex – short for foreign exchange – is trading where the commodity is currency. What makes the Forex market unique is that, unlike other financial markets, the forex market has no physical location or central exchange. Additionally, this market trades 24 hours and its daily volume exceeds $1.4 trillion, making it the largest and most liquid market in the world.

While this sounds exciting, its not for the faint hearted. Forex trading can be fast and furious. If youre just starting out, unless you have your heart set on trading the Forex, I recommend that you prove that your trading plan can trade profitability in other non leveraged markets (e.g. stocks) before entering into this market.

Side Note: Remember, when you become a day trader, trading any leveraged product, you are faced with a double edged sword. On one hand, the leverage will increase your winning trades, however on the other hand, it will increase your losing trades too. When you become a day trader, the secret to successful trading is to first learn to trade in unleveraged markets profitably and then take this system and increase the leverage gradually. When you become a day trader this way, you will clearly understand the risks involved and you will position yourself for the best possible chance at success.

After reviewing the markets outlined above, the next step to become a day trader, is to write down – in the space below – which market you would like to trade in:

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Alternately, if you are new to trading, are not sure where to begin learning on how to become a day trader, and have absolutely no idea what you would like to trade, I recommend you purchase Bill Polous course Instant Profits.

Click on the link below:

http://www.meta-formula.com/instantprofits

What makes this course so invaluable to the beginner, and even the advanced trader, is that you will learn the key principles to trade multiple markets. With this knowledge, you can then choose the market that makes most sense to you.

Lets get your portfolio objectives right.

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MUST DO ACTION STEPS:

  1. Affirm today: I will find a system that fits me and I will become THE world’s best trader at this ONE style of trading.
  2. From the list, select from the list a trading market you are familiar with or one in which you would ultimately like to trade. If you are still not sure, purchase Instant Profits (Click Here To Get Your Copy).

Click on the link below:

http://www.meta-formula.com/instantprofits

Remember to keep any eye out for my next article because I will teach you, what is a trading plan.

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Youve Read Part 7 of The Ultimate Trading Systems Series –
The Formula For Designing Profitable Trading Systems.
To Download This Entire Series For FREE Click Here.
Click Here ==> http://www.ultimate-trading-systems.com/greatnews.htm
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