DAYTRADING #3Stocks, Forex: Market overview for Beginners
While most usually known market is stocks, traders also participate in forex and futures trading. If you want to become a trader, you should start by choosing the right market. In order to succeed, focus your actions on a single market before starting the trades on others. Here’s an overview of stocks and forex markets, which will help you decide.
Day Trade Stocks
If you're thinking of day trading stocks, here are things you should know.
- Minimum starting capital required is USD 25,000. Recommended starting capital is USD 30,000.
- Market hours from 9:30 AM to 4 PM EST. Many day traders also place trades in the hour leading up to the open, called the pre-market.
- Most profitable fluctuations occur between 8:30 and 10:30 AM, and 3 to 4 PM EST.
- A wide, almost infinite amount of stocks to trade.
Many traders prefer to trade same stocks everyday. Once you know a stock trading strategy, little additional research time is required for this method. Others focus on stocks of high interest on a particular day. This takes a bit more research and digging each day.
Day Trading Forex
If you're thinking of day trading forex, here are things you should know.
- Recommended starting capital is at least $500 to $1000. More than $1000 is recommended if you want a decent monthly income stream.
- Forex trades 24-hours a day from 5 PM EST on Sunday to 5 PM EST on Friday.
- Best times to day trade forex depends on the pair being traded. Pairs like the USD/JPY and EUR/USD are best traded between 3 AM and noon EST.
- Lots of currency pairs to day trade, although it's recommended new day traders stick to the EUR/USD or USD/JPY. These provide more than enough volume and price movement to create a day trading income.
Forex is flexible in that you can trade outside of US market hours.