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Beginners learning to make money in the stock market often could use a few simple day trading techniques to get started. Here are a few ways beginners can make a few moves in the market using uncomplicated strategies. People trying these simple day trading techniques should try to keep in mind that any investment involves risk of loss, and there is no strategy that guarantees profits.
Focusing on a Narrow Range of Assets
It is important for any beginner to take advantage of any knowledge, interest, or experience they have when taking their first steps into the world of investing. To that end it is a good idea to pick one industry and stay focused on the securities available in that industry. This is one of the simple day trading techniques called specialization - learning one sector or industry and working trades within it exclusively. The principal strength of this system is it allows a person with a passion for an industry to profit from their knowledge of the companies and products competing for business in it. The principal weakness of the strategy is the potential for myopia - seeing value in specific companies within a sector but not recognizing the possibility that the industry as a whole is changing in a way that leaves the entire sector behind.
Take Advantage of Index ETF Options
One of the great financial inventions of the last couple of decades has been the development of the exchange traded fund, or ETF. These assets enable investors to own a diversified position (overall or within a specific sector) with the use of single transaction. One of my favorite ETFs has been the DIA - an ETF designed to mimic the performance of the Dow Jones Industrial average. It would be difficult to impossible for an individual trader to quickly move into and out of all thirty Dow Components with minimal transaction costs - yet with the click of the mouse these days anyone can. Options on ETFs can be even more lucrative. The strengths of this style include the ability to focus attention on global events without having to continually read the fine print of individual assets to gain a competitive advantage.
Simple Day Trading Techniques Using Alternative Platforms
Although the above strategies may seem polar opposites, many traders have successfully made money using both simple day trading techniques on alternative investing platforms. One of the issues traders had run into was the inability to trade literally one day at a time. Many traders had no choice but to employ strategies which involved trades which were held over multiple days or weeks - which many investors found less than idea. It was not until the evolution of true day trading platforms that investors began to be able to make discrete income-producing investments daily. As time has passed even shorter term, high yield investments have become available - giving day traders more alternative low capital ways to make money investing.
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