Living by traveling and trading is the dream lifestyle of many because it is an activity that basically requires only the use of a PC, therefore it can be performed from the small bar of a tropical beach or from an isolated mountain hut. The daily trading is not perceived as a way to live without working and earn effortless, but it is not so.
According to several market analysts, it seems that 95% of those approaching this world end up losing so much money. In this article, we will understand why people opt for traveling and working online doing day trading.
Day trading is a term that often comes in the context of online trading. But what exactly is Day trading and how does it work? First of all, it has to be said that all these terms, such as learning day trading, online trading, day trading strategy, etc. are not exactly defined. Basically, they all mean the same thing, namely the trading of securities.
A day trader is characterized by the fact that the duration of its trades is limited to a maximum of one day.
Day trading refers to trading within a single day. A day trader buys and sells his position within the same day. Day trading usually doesn’t hold positions overnight.
What are the common features of online trading and day trading?
To understand that, you first need to know what’s needed to become a successful day trader. Since a day trader buys and sells within a day, he will barely be able to trade with large price movements, but only with very small ones.
In order for an acceptable profit to be generated even when trading small movements, a large amount of capital is necessary. Since not everyday trader has such reserves, CFD Online Trading is the ideal solution. Because there you can move with little capital by the leverage effect a large amount of money.
Learn the CFD Day trading
Furthermore, a day trader makes many trades in one day. Therefore day trading may not be expensive in terms of fees. Again, CFD trading is an excellent alternative. As you can see, CFD’s are great for private day-trading. Therefore, most of the private day traders are trading CFDs.
Here’s a Q&A with a top broker:
Why learn day trading?
Learning day trading is pretty much the most intense type of exchange trading. Since a day trader usually trades in very small time units and relies on minimal market movements, this type of action requires a great deal of time. Markets need to be monitored virtually throughout the day to find suitable entry signals and regularly review and adjust existing positions (for example, by dragging the stop).
Since CFD Online Trading is a rather short-term investment method, you should already know. Furthermore, Daytrading, unlike long-term investment methods, characterized by an extremely large trading frequency.
What is meant by that?
Due to the fact that only small movements are traded in day trading and thus one also works in small time units, the number of trading opportunities increases. While a long-term oriented trader travels in a high time unit and therefore receives an entry signal from the market, for example, only once a month, many similar signals are available in day trading. Therefore, in day trading several trades in one day are possible, which can also lead to a higher profit margin. That’s why Day trading offers a wonderful way to earn good money for small traders with CFD’s.
Therefore, it is not surprising that traders are often among the most profitable traders in day trading.
What Online Trading Is Not!
We want to give this chapter a particularly great value, because often the image that CFD Trading beginners have of online trading has little to do with reality. As a result, many day trading beginners approach the subject of CFD online trading with completely false expectations and notions. As mentioned earlier, the general idea of a CFD trader doesn’t have much to do with the Otto Normal Daytrader.
The idea of the private trader goes from the sweat-drenched, nervous and frantic on his keyboard CFD Daytrader to the ultra-cool & unfeeling machine in which not even the loss of the entire account would cause even the slightest emotion. Like so often, the truth is not on either side. Although a CFD Day trader must have some nerve and discipline for a successful trade, the general presentation of a Daytrader is usually grossly exaggerated.
A day trader who sits sweaty in front of his screen has not really dealt with the subject of learning CFD Day trading. Also, it is not necessary (as often advocated) to make certain decisions about the life and death of the account within seconds.
Anyone who acts by risking most of his account in a trade or opening his positions from the gut and willingly opposes any emotionality or rationality is not a day trader, but simply a gambler. Such people would be better off in a casino, so in front of a chart.
Of course, there’s nothing against trying out CFD online trading without much prior knowledge – quite the contrary! But always in a healthy mass (eg with demo accounts). Learning Day trading is fun, even without profound expertise, but you should always be aware of the purpose of your actions. Do you just want to learn day trading?
Would you like to intensively and seriously deal with the topic of day trading? No problem! In this case, you should take the picture of the hair-raising gambler out of your head and realize that it won’t have anything to do with your future as a profitable CFD day trader.
In fact, well-founded and sensible CFD Day trading is more comfortable and relaxed than it is commonly portrayed. If you had decided to start learning day trading because you thought you were not made for such stress, let’s take this wrong day trading picture and encourage you to give CFD online trading another chance to give – you won’t regret it.
Advantages and disadvantages of day trading
Day trading is a special form of stock market trading. The Daytrading is designed for speed and high profit. If you decide to start learning day trading, then you should know the advantages and disadvantages of CFD day trading.
Advantages of Daytrading
As mentioned before, day trading is one of the most profitable options for private exchange trading, thanks to its high trading frequency (and thus many trade opportunities). Most CFD traders who only trade on the stock exchange are therefore day traders. Of course, as a long-term investor, it is also possible to live on the stock market, but here a multiple of capital would have to be available.
Those who practice the profession of day trader have the privilege of doing so from all over the world, since a day trader is not localized. For successful Day trading is neither an office nor necessary, just a laptop and a good Internet connection. So there are day traders who act classically from home, but also those who travel the world armed with nothing more than their backpack and a laptop and operate CFD trading where they like it. Furthermore, a day trader doesn’t have strict working hours. You can trade or not trade whenever you want (except on weekends, of course). So you can set up as your Daytrader your own daily routine, as it suits you.
Not always, but under certain conditions, as a daytrader, you will never again pay taxes and thus save a lot of money. If, for example, you are a Swiss citizen, you won’t have to pay tax on your stock market profits, because, in Switzerland, profits from securities transactions are tax-free, provided that you are classified as a non-professional trader.
To classify you as a full-time day trader, you have to hit pretty hard! In Switzerland, only a handful of CFD day traders are registered as full-time traders, although much more lives exclusively on stock market trading. In Germany too, an everyday trader can use the allowance limits to avoid having to pay taxes.
If you are not a Swiss citizen, there is also a possibility of paying no more taxes in the future. As we already know, a day trader can operate from anywhere in the world. So, if you choose to travel and trade, you can opt-out of your state and become stateless. Since you as a stateless person don’t belong to a state, you are therefore not taxable in any state. This doesn’t work if you are an American or an Eritrean citizen. Because these two countries are currently the only ones who tax their citizens not by whereabouts, but by citizenship.
Disadvantages of day trading The time required by a daytrader
Of course, Daytrading not only brings benefits. The biggest disadvantage of daytrading is the constant presence obligation. While it is enough for an investor to look at his positions once a day, people often have to monitor the positions in day trading. That’s why most Day traders are full-time racers.
Of course, there are other ways to drive a high trading frequency without constantly sitting in front of the screen. These are then medium-term Day trading strategies, which are specially tailored to the needs of part-time or part-time cyclists.
Furthermore, the CFD Day trading can of course be exercised by working people through a clever time management. Especially in the age of the smartphone, it is easy to trade anytime, anywhere. Whether on the train, in the break or just in between.
Day trading strategies
Day traders usually make their decisions with the help of technical analysis. In daytrading, the technical side of the analysis weighs heavier than the fundamental side. For long-term investors, however, this is often the opposite. There, fundamental questions are often given more weight than technical analysis.
For this reason, day trading strategy preferably consist of technical rules. Often, indicators are consulted and support lines and resistance lines worked. An equally frequently used instrument is the theory of market technology, which explains the unadulterated origin of the stock market, ie the mechanism behind the ever-recurring price fluctuations.
Nonetheless, there are also day traders who make decisions based solely on fundamental issues. This variety is called “Newstrader”. Newstrader waits for the release of news that he thinks could influence the price movement. After all, there is news every day that can be relevant to the market. These include daily forecasts from analysts and rating agencies as well as the publication of various numbers, such as the latest data from the labor market et,
Furthermore, Newstrader often work with an economic calendar in which all important publications of the future are listed. That’s why many brokers offer an economic calendar or a live newsfeeder, the so-called “news ticker”, free of charge when opening a trading account.