Bitcoin Day Trading 2018 – Tutorial and Brokers

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Day trading is speculation in securitiesspecifically buying and selling financial instruments within the same trading day. Strictly, day trading is trading only within a day, such that all positions are closed before the market closes for the trading day. Many traders may not be so strict or may have day trading as one component of an overall strategy. Traders who participate in day trading are called day traders. Traders who trade in this capacity with the motive of profit are therefore speculators.

The methods of quick trading contrast with the long-term trades underlying buy and hold and value investing strategies. Some of the more commonly day-traded financial instruments are stocksoptionscurrenciesand a host of futures contracts best day trading broker 2015 as equity index futures, interest rate futures, currency futures and commodity best day trading broker 2015. Day trading was once an activity that was exclusive to financial firms and professional speculators.

Many day traders are bank or investment firm employees working as specialists in equity investment and fund management. However, with the advent of electronic trading and best day trading broker 2015 tradingday trading is available to private individuals.

Some day traders use an intra-day technique known as scalping that usually has the trader holding a position for a few minutes or even seconds. Best day trading broker 2015 day traders exit positions before the market closes to avoid unmanageable risks—negative price gaps between one day's close and the next day's price at the open. Another reason is to maximize day trading buying power. Day traders sometimes borrow money to trade. This is called margin trading.

Since margin interests are typically only charged on overnight balances, the trader may pay no fees for the margin benefit, though still running the risk of a margin call. The margin interest rate is usually based on the broker's call. Because of the nature of financial leverage and the rapid returns that are possible, day trading results can range from extremely profitable to extremely unprofitable, and high-risk profile traders can generate either huge percentage returns or huge percentage losses.

Because of the high profits and losses that day trading makes possible, these traders are sometimes portrayed as " bandits " or " gamblers " by other investors. The common use of buying on margin using borrowed funds amplifies gains and losses, best day trading broker 2015 that substantial losses or gains can occur in a very short period of time. In addition, brokers usually allow best day trading broker 2015 margins for day traders.

Because of the high risk of margin use, and of other day trading practices, a day trader will often have to exit a losing position very quickly, in order to prevent a greater, unacceptable loss, or even a disastrous loss, much larger than his or her original investment, or even larger than his or her total assets. Originally, the most important U. A trader would contact a stockbroker, who would relay the order to a specialist on the floor of the NYSE.

These specialists would each make markets in only a handful of stocks. The specialist would match the purchaser with another broker's seller; write up physical tickets that, once processed, would effectively transfer the stock; and relay the information back to both brokers. One of the first steps to make day trading of shares potentially profitable was the change in the commission scheme.

Inthe United States Securities and Exchange Commission SEC made fixed commission rates illegal, giving rise to discount brokers offering much reduced commission rates.

Financial settlement periods used to be much longer: Before the early s at the London Stock Exchangefor example, stock could be paid for up to 10 working days after it was bought, allowing traders to buy or sell shares at the beginning of a settlement period only to sell or buy them before the end of the period hoping for a rise in price. This activity best day trading broker 2015 identical to modern day trading, but for the longer duration of the settlement period.

But today, to reduce market risk, the settlement period is typically two working days. Reducing the settlement period reduces the likelihood of defaultbut was impossible before the advent of electronic ownership transfer. The systems by which stocks are traded have also evolved, the second half of the twentieth century having seen the advent of electronic communication networks ECNs.

These are essentially large proprietary computer networks on which brokers could list a certain amount of securities to sell at a certain price the asking price or "ask" or offer to buy a certain amount of securities at a certain price the "bid". The first best day trading broker 2015 these best day trading broker 2015 Instinet or "inet"which was founded in as a way for major institutions to bypass the increasingly cumbersome and expensive NYSE, also allowing them to trade during hours when the exchanges were closed.

Early ECNs such as Instinet were very unfriendly to small investors, because they tended to give large institutions better prices than were available to the public. This resulted in a fragmented and sometimes illiquid market. The next important step in facilitating day trading was the founding in of NASDAQ —a virtual stock exchange on which orders were transmitted electronically.

Moving from paper share certificates and written share registers to "dematerialized" shares, computerized trading and registration required not only extensive changes to legislation but also the development of the necessary technology: These developments heralded the appearance of " market makers ": A market maker has an inventory of stocks to buy and sell, and simultaneously offers to buy and sell the same stock.

Obviously, it will offer to sell stock at a higher price than the price at which it offers to buy. This difference is known as the "spread". The market maker is indifferent as to whether the stock goes up or down, it simply tries to constantly buy for less than it sells. A persistent trend in one direction will result in a loss for the market maker, but the strategy is overall positive otherwise they would exit the business.

Today there are about firms who participate as market makers on ECNs, each generally making a market in best day trading broker 2015 to forty different stocks. Another reform made was the " Small Order Execution System best day trading broker 2015, or "SOES", which required market makers to buy or sell, immediately, small orders up to shares at the market maker's listed bid or ask. In the late s, existing ECNs began to offer their services to small investors.

New brokerage firms which specialized in serving online traders who wanted to trade on the ECNs emerged. Archipelago eventually became a stock exchange and in was purchased by the NYSE. Moreover, the trader was able in to buy the stock almost instantly and got it at a cheaper price. ECNs are in constant flux. New ones are formed, while existing ones are bought or merged. As of the end ofthe most important ECNs to the individual trader were:. This combination of factors has made day trading in stocks and stock derivatives such as ETFs possible.

The low commission rates allow an individual or small firm best day trading broker 2015 make a large number of trades during a single day. The liquidity and small spreads provided by ECNs allow an individual to make near-instantaneous trades and to get favorable pricing. Best day trading broker 2015 ability for individuals to day trade coincided with the extreme bull market in technological issues from to earlyknown as the Dot-com bubble.

In March,this bubble burst, and a large number of less-experienced day traders began to lose money as fast, or faster, than they had made during the buying frenzy. The NASDAQ crashed from back best day trading broker 2015 ; many of best day trading broker 2015 less-experienced traders went broke, although obviously it was possible to have made a best day trading broker 2015 during that time by shorting or playing on volatility.

In parallel to stock trading, starting at the end of the s, a number of new Market Maker firms provided foreign exchange and derivative day trading through new electronic trading platforms. These allowed day traders to have instant access to decentralised markets such as forex and global markets through derivatives such as contracts for difference.

Most of these firms were based in the UK and later in less restrictive jurisdictions, this was in part due to the regulations in the US prohibiting this type of over-the-counter trading. These firms typically provide trading on margin allowing day traders to take large position with relatively small capital, but with the associated increase in risk. Retail forex trading became a popular way to day trade due to its liquidity and the hour nature of the market.

The following are several basic strategies by which day traders attempt to make profits. Besides these, some day traders also use contrarian reverse strategies more commonly seen in algorithmic trading to trade specifically against irrational behavior from day traders using these approaches. It is important for a trader to remain flexible and adjust their techniques to match changing market conditions.

Some of these approaches require shorting stocks instead of buying them: There are several technical problems with short sales—the broker may not have shares to lend in a specific issue, the broker can call for the return of its shares at any time, and some restrictions are imposed in America by the U. Securities and Exchange Commission on short-selling see uptick rule for details. Some of these restrictions in particular the uptick rule don't apply to trades of stocks that are actually shares of an exchange-traded fund ETF.

Trend followinga strategy used in all trading time-frames, assumes that financial instruments which have been rising steadily will continue to rise, and vice versa with falling.

The trend follower buys an instrument which has been rising, or short sells a falling one, in the expectation that the trend will continue. Contrarian investing is a market timing strategy used best day trading broker 2015 all trading best day trading broker 2015. It assumes that financial instruments which have been rising steadily will reverse and start to fall, and vice versa. Best day trading broker 2015 contrarian trader buys an instrument which has been falling, or short-sells a rising one, in the expectation that the trend will change.

Range trading, or range-bound trading, is a trading style in which stocks are watched that have either been rising off a support price or falling off best day trading broker 2015 resistance price. That is, every time the stock hits a high, it falls back to the low, and vice versa.

Such a stock is said to be "trading in a range", which is the opposite of trending. A related approach to range trading is looking for moves outside of an established range, called a breakout price moves up or a breakdown price moves downand assume that once the range has been broken prices will continue in that direction for some time. Scalping was originally referred to as spread trading. Scalping is a trading style where small price gaps created by the bid-ask spread are exploited best day trading broker 2015 the speculator.

It normally involves establishing and liquidating a position quickly, usually within minutes or even seconds. Scalping highly liquid instruments for off-the-floor day traders involves taking quick profits while minimizing risk loss exposure. The basic idea of scalping is to exploit the inefficiency of the market when volatility increases and the trading range expands. When stock values suddenly rise, they short sell securities that seem overvalued.

Rebate trading is an equity trading style that uses ECN rebates as a primary source of profit and revenue. Most ECNs charge commissions to customers who want to have their orders filled immediately at the best prices available, but the ECNs pay commissions to buyers or sellers who "add liquidity" by placing limit orders that create "market-making" in a security.

Rebate traders seek to make money from these rebates and will usually maximize their returns by trading low priced, high volume stocks. This enables them to trade more shares and contribute more liquidity with a set amount best day trading broker 2015 capital, while limiting the risk that they will not be able to exit a position in the stock. The basic strategy of news playing is to buy a stock which has just announced good news, or short sell on bad news.

Such events provide enormous volatility in a stock and therefore the greatest chance for quick profits or losses. Determining whether news is "good" or "bad" must be determined by the price action of the stock, because the market reaction may not match the tone of the news itself. This is because rumors or estimates of the event like those issued by market and industry analysts will already have been circulated before the official release, causing prices to move in anticipation.

The price movement caused by the official news will therefore be determined by how good the news is relative to the market's expectations, not how good it is in absolute terms. Keeping things simple can also be an effective methodology when it comes to trading. These traders rely on a combination of price movement, chart patterns, volume, and other raw market data to gauge whether or not they should take a trade.

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There are five major stock broker age houses in the United States, often referred to as the "big five brokerages. Scottrade is a privately owned retail brokerage and is often classified as a "discount brokerage. The company was established in to provide services to self-directed investors. In , it is based out of St. Louis, Missouri, and has branch offices in the U. As of October , Scottrade reported having 3. All of these customers, plus an additional 1. It was the first real discount brokerage, although there are cheaper alternatives available in The firm added an average of 80,plus gross accounts every month in , making it one of the fastest-growing brokerage houses in the world.

Like with Scottrade, Schwab customers can open checking accounts with their brokerage accounts. Fidelity is the nation's largest keeper of k retirement savings plans and the largest provider of b plans for nonprofits. Through its mutual funds and other advisory services, Fidelity has tens of millions of nonbrokerage customers, something the other "big five" companies cannot claim. As of Q2 , Fidelity had There are more than investor centers in the U. Fidelity is the best choice for brokerage clients who also want to invest in Fidelity ETFs and mutual funds, there are more than Fidelity funds, since the firm offers discounts and commission-free transactions for Fidelity products.

Otherwise, there are probably cheaper and more intuitive platforms out there. ETFC began as a holding company and has transformed into a leading online discount brokerage service. The company was hit hard during the financial crisis because of high exposure to subprime mortgage portfolios.

Its stock dropped The turnaround worked, and E-Trade is a leading financial firm when it comes to mobile accessibility, online trading tools and a customizable user experience. The firm also offers two checking accounts and mortgages.

TD Ameritrade Holding Corp. Scottrade Scottrade is a privately owned retail brokerage and is often classified as a "discount brokerage. Fidelity Investments Fidelity is the nation's largest keeper of k retirement savings plans and the largest provider of b plans for nonprofits.