Is it possible to become rich by stock trading? Do people make enough out of day trading?

Introduction: 

Is it possible to become rich by stock trading? The quick answer to this question is yes, as long as you know what you are doing and you have the right strategy in place.

Now, I’m not saying that trading will make you rich or pay off your mortgage (although it’s possible). What I am saying is that if you want to be able to lead a very comfortable life left over leftover then you should consider day trading stocks as one of your main sources of income. So if trading stocks could potentially make me rich, why don’t I do it all the time?

A story about my friend

One of my good friends is extremely smart and is very good at making decisions under pressure. So he decided to start day trading when he found out that someone in his office does it for a living. After a few months, he was up about $10,000 but then lost everything on one trade.

He did not have enough money to cover his losses so he had to sell all of his belongings just to pay off debt collectors. He got lucky because now I am supporting him until he gets back on his feet again. I don't think anyone should ever day trade unless you are an expert or you have a lot of extra cash lying around just in case something goes wrong with your trades. The is too high and there are better ways to invest your money than it all on one trade hoping for big returns.

What you need to know about day trading

Day trading, or buying and selling securities in less than one day, can be a hard business that you’re best off avoiding if you are starting out with little or no experience in financial markets.

Most professional traders will say that you need at least two years of market analysis before even thinking about trying your hand at day trading.

An actual example of how I got started

So, you want to start investing in stocks? Here's how I did it! When I first started out, I knew nothing about investing in stocks or shares and didn't know what kind of questions to ask. So, I decided that reading books would be my best way forward; after all, books don't lie! Reading as many books on share dealing as I could find enabled me to fill in any gaps that might exist in my knowledge base.

What followed was an intensive period where I read anything and everything that came my way; from newspapers through self-help manuals - which were mostly about how not to lose your shirt - to business magazines with articles covering every aspect of share dealing imaginable.

Day Trading vs Swing Trading

It depends on what you mean by best. Do you mean best for making money or best for becoming a successful trader? What about liquidity, costs, volatility, and spreads - all important factors when choosing a market?

It's hard to say which markets are best for new traders because there are so many variables that go into deciding what market is best for someone's situation. So instead I'm going to talk about four broad categories of markets which you could loosely call high-volume, low-volatility; high-volatility, low-liquidity; emerging markets; and speculative small-cap or penny stock companies.

What are the best marketplace places for day trading

There are many markets you could choose from when you day trade, but there are two that stand out above all others as being great for experienced traders: The FOREX and futures markets. The FOREX market is extremely liquid, meaning that it never closes and there’s always an open position available no matter what time of day or night it is (the market runs on weekends and holidays too).

The futures market offers high levels of leverage, something that allows you to take advantage of small moves in your favor with minimal exposure (if done correctly). In general, both markets offer enough liquidity and high leverage that allow you to profit in all types of markets. They are great places for active traders who know what they're doing!

Money management

You'll quickly find that being an active trader doesn't allow for much extra spending. To be successful, you must manage your trades, income, and capital properly – so have your plan in place from the beginning. And don't get sloppy:

You might win or lose on any given trade, but remember that over time you'll win 50% of your trades and lose 50%. The key is cutting losses short and letting winners run; unfortunately, many novice traders chase after their losses (and give up on winning positions) too soon – which dramatically increases their profile.

Choosing the right broker

To get started, you need a broker or someone to trade for you and advise you about your investments. This person is commonly referred to as an investment advisor or financial planner and manages what’s called your portfolio: all of your investments, including retirement savings, real estate, and stock market holdings. Choosing one involves weigseveraler of factors:

Do you want your account with a human being who will call you when there’s good news (or bad) or do you want an online-only account that lets you track performance but also tells an algorithm what to buy and sell? How much are these services going to cost and how much value do they add?

Resources – Tools and Tips

We are going to use Investopedia as our primary resource for learning how you could use fundamental analysis and technical analysis as tools in your new job. You should bookmark Investopedia and use it often!

We recommend that you open an account with Robinhood for free, learn about their application and begin looking at stocks there that interest you as well, just so you can get an idea of what is possible (and what isn’t). Don’t worry about doing actual trading just yet; we’ll get into all of that in a bit.

Conclusion

Yes, you can use stocks as an investment and generate a positive return on your investment. It's not easy though. And contrary to popular belief, you don't have to have any particular skills or traitoer to invest in financial markets.

The knowledge that is required is available for free (or very cheap) online and through public libraries - all one needs is interest and perseverance and over time, good returns are achievable. But like I said earlier - it's not easy!