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While, as we have already discussed, there most certainly is an element of gambling involved, that element can be reduced with thorough knowledge of the stock one is trading. In watching the movement of a stock very closely over a period of time, you can learn the patterns that tend to occur at certain periods of the trading day. And with experience on a Level II screen, you become reliably able to anticipate and predict very short-term movements more often than not. |
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My point is that day traders who have no idea about the company they are trading are at a distinct disadvantage compared to the traders who know their stock thoroughly. They have studied it day after day and traded it often enough to be confident of their moves in and out of it. For them, the element of gambling is going to be less than for the traders who couldn't care less what company is behind the stock symbol they are trading. |
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As a group, professional day traders appear to be maturing in their thinking. They are becoming more flexible and more knowledgeable in their approach to trading. They are borrowing some of the thinking of institutional money managers who are active traders. In the last two or three years, those who followed blindly the instructions to begin trading 1000 shares before they even knew what they were doing lost a lot of money. But they also generated a lot of revenue in commissions to the firms with which they were trading. |
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The movement is now away from pushing day traders to generate lots of commissions through trading. That is not where the money is now being made. After all, we've already reached the point where a sufficient account balance means free trading. The shift today is toward better education of traders before they are allowed to have a seat on the trading floor. And even those who choose to trade in the comfort of their own homes are interested in getting an education before they start risking their capital. Some seek out programs in day trading firms and then go back to their homes to apply what they have learned. |
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The short-sighted inadequacies of the past in allowing traders to begin trading with poor training and no supervision are trying to be corrected. And although the risks continue to be high for large numbers of day traders, the media does not tend to give the public the whole picture about the more positive direction the industry is moving. |
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Week-long courses cost $3000 and up. Some firms, like Online Trading Academy, require a second advanced course, also a week, that costs another $3000. This means you will have made an |
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